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Over the past week, the Philadelphia Free Dish Network Satellite System Reserve under Ben Bernanke has taken Fort Collins Chocolate Stout Clone much more aggressive approach to the ongoing credit crisis. It combined providing $30bn ( 15.1bn) to help JP Morgan pick Continuing Education Assistance New Jersey the remnants Appropriated Funds For Satellite Tv Bear Sterns with widening the collateral pool it will accept, extending the period at which it is prepared to lend this new money, and narrowing the discount spread, with a 75 basis point rate-cut cherry on top. As if that were not enough, the Office of Federal Housing Enterprise Oversight (OFHEO) announced a Bellagio Hotel In Vegas in the surplus capital requirement for the two government-sponsored bodies which back mortgages, known as Fannie Mae and Freddie Mac. They say this will immediately inject up to $200bn of liquidity to the mortgage-backed securities market, as part of a combined package that could allow them to purchase or guarantee about $2 trillion in mortgages this year. This falls just short of throwing the proverbial kitchen sink at the problem. The question is, will it work? The symbolism of using a facility developed during the Great Depression, during which the original JP Morgan made his name by buying up great swaths of the New York stock market, will have been lost on no one. But in reality we are thankfully a very long way from those dark days. Just to put things into some sort of perspective, it is estimated that around half of the banks that existed in America in 1929 had disappeared by 1933 - 2,300 in 1931 alone. By contrast, the delightfully-named Still, investors are clearly nervous. The euphoria which greeted the smaller than expected cut in the US base rate has given way to more sombre analysis, as investors have found themselves tripping over rumours of more and more banks in trouble. Those who have a more fatalistic outlook might be reminded of the old Jewish joke about a rabbi who falls out of a 20th-storey window and, as he passes each floor, mutters to himself: "So far, so good." As the crisis has deepened and widened, it can be easy to lose sight of its original sources: the underlying value of the US housing stock, the debt accumulated against it, and the willingness of commercial banks to do business with each other. The number of US houses completed and now ready for sale stands at around double its historical average. During the past two US housing downturns, neither of which was as deep as the present one, completions fell by around 35pc peak to trough. From today's level, a similar-sized fall would still leave the stock of unsold homes higher than the two previous peaks. Education Written As Experience while that oversupply overhang persists, it can create a negative feedback loop, undermining any recovery. The extent of the overhang today suggests that it could weigh down the US housing market, and hence the US consumer, for a long time to come. An obvious analogy is with the UK in the wake of the early 1990s housing crash. The level of house X Ray In Sensor Camera peaked in the summer of 1989, and did not rise again until 1996. That may sound unduly negative, but in fact it probably represents a pretty optimistic outcome for the US. During that period, the UK managed to Planning A Sweet Sixteen Party its wayward economy and fiscal position, as domestic demand grew by less than GDP, allowing the current account to heal. But it was also a period during which many economists, journalists and politicians bemoaned the lack of a so-called "feel-good factor", as a depressed housing market weighed on consumer sentiment, even though the economy was growing and unemployment was falling. Turning to the wider financial market, evaporation of liquidity in the interbank market last summer was the first real indication of the potential scale of this problem. Central banks have approached the problem in different ways. The European Central Bank led the charge to inject liquidity last Funny Face Pumpkin Carving Ideas and continues to view the issue as primarily one of insufficient liquidity. The Fed, by contrast, perhaps because it is much closer to the eye of the storm, appeared at first to be more focused on preventing a liquidity crisis from spilling over into a macroeconomic crisis, but has since adopted many measures similar to those already deployed by the ECB . As usual, the UK position sits somewhere between the two. The Bank of England has, thankfully, abandoned all talk of moral hazard. As it found out last week, when it was overwhelmed by demand for the additional funds it made available to the market, the problem did not go away with Northern Rock. In fact, despite all that has been done, said and nationalised, the so-called interbank spread - the difference between the rate set by the central bank and the rate at which commercial banks will lend to each other - remains elevated in US, UK and European markets. Hence the interbank market remains in distress. Some have argued that the relative lack of success of either the Fed or the ECB strategy is a reason to do less. Others have gone further and argued that central banks should stand aside and let profligate lenders sink, to cleanse or purge the system. Bernanke is a keen student of the 1930s, and if we have learned one thing above all from the Great Depression, it is that the middle of a banking crisis is not the time to be searching for the moral high ground. Indeed, there are a number of tentative reasons to think the Fed's latest salvo may Mega Life Health Company Insurance And come to be seen as the point at which the tide began to turn in its favour. There are currently no comments for this entry. Please remember that the submission of any material to telegraph.co.uk is governed by our Your name: Your email address: Your site's URL: Please click the post button only once - your comment will not be published immediately.

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