Fed Weighs Interest on Reserves as New Benchmark Rate – By Scott Lanman – … The central bank has been unable to control the federal funds rate since the September 2008 bankruptcy of Lehman Brothers Holdings Inc., when it began flooding financial markets with $1 trillion to prevent the economy from collapsing. … “One option you might want to consider is that our policy rate is the interest rate on excess reserves and we let the fed funds rate trade with some spread to that,” Richmond Fed President Jeffrey Lacker told reporters on Jan. 8 in Linthicum, Maryland. … – Bloomberg
Fed May Take Chance End to Debt Purchases Won’t Hurt Housing – By Steve Matthews and Vivien Lou Chen – Jan. 27 (Bloomberg) — The Federal Reserve may take a chance the housing market can stage a comeback without its support by announcing today it will stick to the plan to end a $1.25 trillion program of mortgage-debt purchases in March. … “This raises a huge risk to the recovery,” said Eisenbeis, now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey. “You don’t want to risk cutting off the recovery in housing by essentially pulling the rug from under it.” … – Bloomberg
U.S. May Retool Mortgage Program to Help Underwater Homeowners – By Dawn Kopecki and Theo Francis – … The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted. The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview. While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity. … – Bloomberg
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If Geithner Goes, The Top Two Contenders – By: Lee Brodie – … And although nobody is tossing their hat in the ring officially, Clifton tells the desk that insiders are whispering about a short list; and the names being floated are Senator Christopher Dodd (D-CT) and former NJ Governor Jon Corzine. … – Fast Money CNBC
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Pimco’s Gross Says U.S. ‘Needs’ Bernanke to Stay as Fed Chairman – By Eric Martin – Bloomberg Business Week
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Portugal next? – This Little PIIGy Is About To Get A Sovereign Downgrade – Joe Weisenthal – The "P" in PIIGS, Portugal, is the next euro nationa to bring heartburn to the union. Fitch has come out with a negative rating on the nation’s debt, according to ForexLive … – Money Game at Business Insider
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Freddie Mac may finance Stuyvesant Town purchase – Bloomberg – U.S. residential mortgage company Freddie Mac (FRE.N) (FRE.P) may consider providing finance to the buyer of Stuyvesant Town and Peter Cooper Village apartment complex in Manhattan, Bloomberg said, citing a person familiar with the matter. – Reuters
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Fannie Mae Economist: US Home Price Decline Not Over Yet – By Judith Burns, Of Dow Jones Newswires – The rebound in the U.S. economy will be weaker than usual, with housing likely remaining a drag on it through 2012, Fannie Mae (FNM) chief economist Doug Duncan said Tuesday. … Duncan forecasts that U.S. growth will be half the typical 6.5% annual rate seen coming out of a recession, with the economy weighed down by excess housing supply and cautious consumers and lenders. … – NASDAQ