The Federal Reserve Bank of New York, and by implication the Federal Reserve itself, just tipped its hand.
SAN FRANCISCO (MarketWatch) — The Federal Reserve Bank of New York is part of a group of investors pressuring Bank of America Corp. to repurchase billions of dollars in home loans.
Note they are applying the pressure through a law firm.
I said to watch for this a few weeks ago here.
". . . look for an increasingly more conservative Fed. Its owners are used to making money, not losing it. A balance sheet polluted with worthless garbage will not serve their needs, nor would it ensure their survival. "
FRBNY is speaking loud and clear: enough is enough. We're not the buyer of last resort. We're going to keep that crap off our balance sheet.
This news, along with Bernanke's incredibly candid comments from last Friday, is effectively the end of QE2.
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