Markets Around The World Are Selling Off: Nikkei -4% Japan! BofA Falling In Pre-market -2,25%, New Bill Plans To Close Fannie And Freddie, Will Leave US Home Buyers On The Hook Again!!! September Tapering Is A Done Deal!!!
Stock markets around the world are in the red as the world’s central banks meet.
England’s FTSE 100 is down 0.4%.
France’s CAC 40 is down 0.3%.
Germany’s DAX is down 0.5%.
Spain’s IBEX is down 0.7%.
Italy’s FTSE MIB is up 0.2%.
Later this morning, the Bank of England and its governor Mark Carney will release its quarterly inflation report. Economists expect the event to include the information as to how the BoE plans to include forward guidance with its monetary policy announcements.
The sell-off in Europe follows a sharp sell-off in Asia.
Japan’s Nikkei fell 4.0%.
Korea’s Kospi fell 1.4%.
Australia’s S&P/ASX fell 1.8%.
Hong Kong’s Hang Seng fell 1.5%
China’s Shanghai Composite fell 0.6%.
The Bank of Japan begins its two-day monetary policy meeting today. According to analystssurveyed by Bloomberg, the BoJ will expand its easy policy.
Plans to close Fannie and Freddie will leave US homebuyers on the hook again
Future homebuyers could feel the pinch from plans in Congress to scrap Fannie Mae, Freddie Mac
WASHINGTON (AP) — Homebuyers could feel the pinch if Congress follows through on plans to shut down Fannie Mae and Freddie Mac, the government-controlled mortgage guarantee giants that were rescued by a $187 billion taxpayer bailout during the financial crisis.
Borrowers would probably end up paying slightly higher mortgage rates under House and Senate bills that would phase out Fannie and Freddie over five years and shrink the government’s huge role in guaranteeing mortgage securities. Fannie and Freddie teetered under a crush of massive losses on risky mortgages before being bailed out.
The House Republican bill would virtually privatize the mortgage market. The Senate’s bipartisan plan envisions a continued but more limited government role in insuring mortgage securities. Supporters say that would keep mortgages available and affordable.
In a speech on Tuesday, President Obama signaled that Washington may finally be returning to the place where the financial crisis started. With the housing market on the mend, Mr. Obama said it was time to “wind down” Fannie Mae and Freddie Mac.
“I believe that our housing system should operate where there’s a limited government role and private lending should be the backbone of the housing market,” Mr. Obama said in Phoenix, a city that is a symbol of both housing booms and busts.
Nikkei -4% #Japan
Nikkei volatile trading, made lower high. Fukushima concern adding to pressure
The debate over the timing of the taper may have just come to an end.Since May, economists have been struggling to figure out when the Federal Reserve would begin to taper, or gradually reduce, its monthly purchases of $85 billion worth of bonds.Various Fed members including Chairman Ben Bernanke have all emphasized the need to see improving economic data before the Fed would think about tapering.
Economists have generally speculated that the Fed’s words and the economic data have pointed to a September taper.
However, Chicago Fed President Charles Evans, arguably the most dovish member of the Fed, may have given the word that acted effectively as the green light for a September taper.