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Isnt the obvious answer for the Fed to start dropping interest rates somewhere in between the 0 and current level? eases a lot of pressure on the underlying ass
by ethagknight 1y ago
Isnt the obvious answer for the Fed to start dropping interest rates somewhere in between the 0 and current level? eases a lot of pressure on the underlying assets and allows for markets to start moving again. Even if it's a short reprieve from current rates, a window to repackage and move assets would buy everyone time and start to bleed off some underperforming notes (or maybe just the marginal ones, still reducing drag).
Or maybe this is a different issue that im not quite grasping.
- sidewndr46 1y agoThis seems to be the quintessential comment along the lines of how we can kick a time bomb down the road a bit.
- y-curious 1y ago>kick a time bomb down the road Add it to the list that includes social security funding, population decline, poor infrastructure, attitudes towards vaccines and the national debt. It's just how we roll
- ethagknight 1y agoWell no not at all, the loans already exist, and I guess you assume write offs are a given, so rip the bandaid off? Why not work to avoid? Loans are tied to a term, borrowers can resolve their own liquidity issues, so it’s not crazy to give underwater loans time and breathing room in rate to work out without forcing a collapse. Simply broaden underwriting requirements for new loans. Time, value, and risk, right?