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The following is an editorial on some news I read on 11/25. I then went and did some research on this and put together this article. Do you need a breaking news article or other content written? I can help you. All I need is a list of keywords you want to have in the content and a synopsis of what you want the page to be about. Contact me today.


Government Announces Two New Programs Aimed at Unfreezing Credit Markets

The Bush administration and the Federal Reserve rolled out two new programs Tuesday that would provide up to $800 billion in an effort to get more loans flowing in such critical areas as mortgage lending, credit cards, auto loans and small business loans. Millions of Americans rely on the kinds of loans that were targeted in one of the new programs announced Tuesday. Total bailout commitments, loans and pledges of backing neared a staggering $7 trillion.

The Federal Reserve will purchase $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses. That market essentially froze in October. These types of loans as a result have become harder to obtain and have carried higher interest rates.

The Fed also announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.

Analysts predict the Fed program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the housing market, which is suffering its worse downturn in decades.

The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.

A weak reading for October indicates that the current quarter could be off to a rocky start. Nariman Behravesh, an economist at IHS Global Insight, said he was expecting GDP to shrink at a 4 percent rate in the current quarter, reflecting the battering consumers are taking from the worst financial crisis since the 1930s. He predicted that the economy would remain in recession through the first half of next year.

"We are in the early stages of one of the worst recessions in the postwar period, even factoring in a massive stimulus program," said Behravesh.

These new programs would greatly expand an initial modest effort announced back in September in which Treasury spent $26 billion to purchase mortgage-backed securities. The current credit crisis was triggered by soaring losses on securities backed by subprime loans.

Meanwhile, in Chicago, President-elect Barack Obama named his budget director and said they both will focus on the nation's soaring budget deficit - but only after economic revival is under way.

Obama has said a top priority will be working with Congress to enact a stimulus package with the goal of creating 2.5 million new jobs over the next two years. Analysts believ such an effort will require spending between $500 billion and up to $700 billion.

President-elect Obama will be announcing on Wednesday the creation of a president's Economic Recovery Advisory Board, chaired by former Federal Reserve Chairman, Paul Volcker, to provide outside advice from heavyweight thinkers, officials said.

This new body reflects the magnitude of the nation's economic problems, which Obama wants to solve in an integrated way - not just through attention to markets, but also to jobs, wages and foreclosures. The board, intially, will exist for two years, but may extend for longer.Paul Volcker is credited with playing the leading role in ending a period of high and rising inflation and restoring a base for sustained growth.

President-elect Barack Obama has hit the ground running. He's kept himself in the loop on the economy and has surrounded himself with plenty of experience in economic matters. He is already taking decisive action to help jump-start the economy, but we have to keep our expectations realistic. While there's a lot of things going on in the back field while we wait for Obama's inauguration, we really can't expect any major changes for probably the first two years. But, at least he's taking the scope of the problem seriously and doing what he can to resolve it.

Maria Ny is a published author. She writes articles and website content on a variety of subjects including various types of mortgages, information on various law practice areas, FICO credit scores, search engine optimization and internet marketing, animals and instructional content. Visit www.marianydesigns.com to read more informative articles and to find out how she can help you with your web content needs.