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Today's Outrage: Fed Finally Doing Its Part

The Federal Reserve is a little behind schedule but is still way ahead of the Treasury Department in cleaning up the mortgage mess.

Here it is already Jan. 6 and the

Federal Reserve

is just starting to buy mortgage-backed securities from

Fannie Mae


Freddie Mac


Back in November, the Fed said they planned to spend $500 billion to help Fannie and Freddie "with the goal of beginning these purchases before year-end." Yesterday, the Fed announced it had

started making the purchases.

Well, at least the Fed is moving quicker than the rest of the U.S. government.

We were promised in October that the

Treasury Department

would use the separate $700 billion taxpayer bailout fund to help clear out the even more dubious subprime-related securities that nearly toppled the global financial system.

Bear in mind that these are two different piles of money. The Fed is spending $500 billion to buy supposedly less-risky mortgage-backed securities from Fannie and Freddie. The Treasury Department is supposed to be spending its $700 billion on the more toxic securities backed by other financial institutions.

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So what's happening to the subprime-related securities? Not much, it seems.

Treasury Secretary Henry Paulson embarked on a very different path and has been more keen to invest taxpayer funds directly into banks such as


(C) - Get Report


Bank of America

(BAC) - Get Report


Goldman Sachs

(GS) - Get Report


Wells Fargo

(WFC) - Get Report


So while the Fed is a little behind schedule, at least it's doing exactly what it promised.

That's more than we can say for Paulson and his Treasury Department.