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Fed To Buy Mortgage-Backed Securities
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STEVE INSKEEP, host:
NPR's Business News starts with the government's plan to purchase toxic assets.
The Federal Reserve says it's going to purchase $500 billion worth of mortgage-backed securities by mid-2009. We're at that point where $500 billion is a big story, but the not the biggest story, even of the day, $500 billion. The securities consist of pools of home mortgages, many of them subprime, as they're called. Before the housing crisis earlier this year, they were bundled together and sold to investors. And nobody wants to buy them now, nobody knows what they're worth. The original bailout plan, passed by Congress last year, anticipated that the Treasury Department would buy these securities. In the end, the Treasury did something else with its money, but now the Fed will spend that 500 billion. Transcript provided by NPR, Copyright NPR.
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