The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.

The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S.  Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Ms. Cumming voted as the alternate for Timothy F. Geithner.

Wall Street may be left a little smaller after the dust from the credit crisis settles. But will its next incarnation be even more profitable?

Shakeups at Washington Mutual and Wachovia. Roundtable Discussion with Andrew Seibert of Nextier Wealth Management and Forbes CEO Steve Forbes.

Washington Mutual shares are down after Kerry Killinger stepped down as chairman. Shares of Wachovia are falling below it’s lowest value in almost 13 years after Ken Thompson was ousted.

Chairman Lanty Smith has been appointed interim CEO. Is this new management what these companies need to get back on track? Are there more troubles for financials?

I think their values will go lower until they get a feel for who will take over. There are probably more Writedowns to come.

These banks have not gone beyond the problem of the Subprime Mortgage Industry and there is possibly another shoe to fall.

If the Credit Deterioration continues, there will be many more problems.

Wachovia has big news today. Shares of falling in the premarket after the company ousted CEO Ken Thompson.

Wachovia stated he is stepping down at the request of the board, saying no single precipitating event calls because the board to reach the decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and performance. Perhaps you can call it an understatement.

Shares down 57% in the past 12 months.

As we continue to analyze and manage our product set, Chase has made the decision to discontinue offering our Subprime and Home Equity products through our Wholesale channel.

New Wholesale Subprime and Home Equity registrations will not be accepted after Friday, May 16, 2008.

Critics are blaming Alan Greenspan for today’s financial crisis, but now the former Federal Reserve chief is fighting back.

Greenspan sets the record straight in an exclusive interview.

Part 1

Part 2

What are others saying about Alan Greenspan

Alan Greenspan unfair blame for sub prime crisis…

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The Stock Market Crash Of October, 1987

Alan Greenspan was appointed Chairman of the Federal Reserve Bank in August of 1987 and at this time was standing in the shadow of Paul Volcker, whom Wall Street trusted as a tested leader in moments of crisis Exploit The Market - http://exploitthemarket.com/

National City Closes Residential Wholesale Lending

National City will reduce its quarterly dividend by 49 percent and cut 900 more jobs as it stops making home loans through their wholesale division.

The lender has cut its staffing by 3,400 positions in the past year, including the reductions announced today, as the credit crunch worsens.

National City will continue making home loans through its own staff, the bank said. The housing market “requires aggressive steps to overcome the near-term challenges”, Chief Executive Peter Raskind said in a statement today.

“It is clear that origination volumes will be lower going forward”, it appears that the type of mortgages offered by National City are no longer desired on the secondary market.

Mortgage companies who offer Home Equity Lines of Credit or ’second mortgages’ find themselves in a particularly awkward position in todays market. Millions of homeowners that have a Home Equity Line of Credit have little or no equity left on their home, many are in depreciating markets and even more have taken out the stated income or as they are also known as, ‘liar loans’. What makes this awkward for lenders is the fact that in the event of a foreclosure, which could be in the range of 2 million in 2008, the primary mortgage holder is financially compensated first and “IF” there is any remaining money available it goes to the second mortgage holder. Often times the second mortgage holder receives little or no compensation.

National City will pay 21 cents a share on Feb. 1 to shareholders of record on Jan. 14, the Cleveland based bank said. The dividend was previously 41 cents a share.

On December 20, 2007, the Federal Reserve will offer $20 billion in 35-day credit through its Term Auction Facility. Additional information regarding the auction is listed below; the auction will be conducted as specified in this Announcement, Regulation A, and the terms and conditions of the Term Auction Facility (www.federalreserve.gov/monetarypolicy/taf.htm).

Description of Offering and Auction Parameters

Offering Amount:	$20 billion
Term:	35-day loan
Bid Submission Date:	December 20, 2007
Opening Time:	10 a.m. EST
Closing Time:	1 p.m. EST
Notification Date:	December 21, 2007
Settlement Date:	December 27, 2007
Maturity Date:	January 31, 2008
Minimum Bid Amount (per bid):	$10 million
Bid Increment	$100,000
Maximum Bid Amount (per institution):	$2 billion (10% of Offering Amount)
Minimum Bid Rate:	4.15 percent
Incremental Bid Rate:	0.001 percent
Minimum Award:	$10,000
Maximum Award:	$2 billion (10% of Offering Amount)

Submission of Bids
Participants must submit bids by phone to their local Reserve Bank between the Opening Time and Closing Time on the Bid Submission Date.

Notification
Summary auction results will be published on the website of the Board of Governors of the Federal Reserve System (www.federalreserve.gov/monetarypolicy/taf.htm) at approximately 10:00 a.m. EST on the Notification Date. Between 10:00 a.m. and noon EST on the Notification Date, Reserve Banks will notify individual institutions in their districts that have submitted winning bids of their awards. Participants have until 3:00 p.m. EST on the Notification Date to inform their local Reserve Bank of any error.

Rounding Convention
Pro rata awards will be rounded to multiples of $10,000. Normal rounding convention will be used, except that awards under $10,000 will be rounded to $10,000.

2007 Monetary Policy Releases

A Worsening Outlook: Bank of America. Rising Credit Losses, Problems in Credit Cards and Home Equity, Writedowns on CDOs “Unknowable”, Charge-Offs Will Rise Next Year; CEO Ken Lewis Will Face More Problems as Consumer Spending Slows; Some Say Bank of America Stock Will Outperform the mortgage industry.

Bank of America, PNC Financial, Wachovia Announce $5+ Billion In Writedowns. Bank of America Says Provision Cost Reflecting Boosted Reserves; PNC Financial 4Q Forecast Below Analyst Estimates, Increases Provision and Revises 2008 Forecast; Wachovia Sees 4Q Provision Expense $1 Billion Higher Than Charge Offs.