During Japan s lost decade, the Bank of Japan mostly bought Japanese government bonds, whereas the Fed is trying to reopen secondary markets for securitized private lending (which in the US is as important as bank lending), buying mortgage backed securities and consumer and business loans, as well as U.S. Treasury bonds.

The Bank of England is buying UK government bonds ( gilts ).

The dubious mortgage securities are so called mortgage backed securities.

Businessmen and women become afraid that stocks, and the values of the machines and factories that back those stocks, may fall further.

Consider investors in Fannie and Freddie bonds.

This is a clear demonstration of how derivatives and synthetic securities were used to create imaginary value out of thin air.

In 1980, financial assets stocks, bonds, and bank deposits totaled around 100 of GDP in the advanced economies.

No one shows up at Treasury auctions to buy US bonds, and fewer foreigners buy US stocks or companies and real estate.

Securities took the place of traditional bank credits.

Mortgage banks kept some claims on their books, but sold most of them to investment banks as mortgage backed securities. The investment banks blended these securities into asset backed securities and collateralized debt obligations (CDOs) and sold them on to financial institutions throughout the world.

The investment banks blended these securities into asset backed securities and collateralized debt obligations (CDOs) and sold them on to financial institutions throughout the world.

With China saving nearly 50 of its GNP, all that money had to go somewhere. Much of it went into US treasuries and the obligations of Fannie Mae and Freddie Mac.

The group calls their version of contingent capital regulatory hybrid securities.

Of the roughly 200 trillion in global financial assets today, almost three quarters are in some kind of debt instrument, including bank loans, corporate bonds, and government securities.

The bonds issued by Fannie and Freddie were widely thought to carry an implicit US government guarantee.

Central banks can buy and sell dollar securities without moving those markets.

Markets long ago stopped buying bonds issued by Greece, Ireland, and Portugal, and might soon stop buying paper issued by Italy and Spain or do so only at prohibitive interest rates.

Unless the Treasury overpays for the securities, the scheme would not bring relief.

Investing fund surpluses in foreign securities would counteract the tendency for the exchange rate to rise.

Tailor made products could be put together from exchange traded instruments.

Their absence makes it difficult to invest too large amounts of money in Russian securities.

By buying government securities, the central bank injects cash into the banking system.

Mortgage backed securities were urged onto investors for whom they were too risky.

In its simplest form, the securities could be shares in GDP.

That these collateralized mortgage obligations (CMOs, or bonds backed by a pool of mortgages) found a ready market, both in the US and abroad, reflects failure on several fronts.

Central bankers cannot explain equity or housing prices and their movements any better than investors can.

The rest was due to an 18 decline in deposits, with the loss of confidence mainly hitting state owned banks.

US banks finance up to 100 of a house s value, sometimes even more, and the sub prime market even includes loans to people without jobs and income.

The regulatory hybrid securities would have all the advantages of debt in normal times.

The sharp fall in long term rates induced investors to buy equities, driving up share prices.

By contrast, such US securities are like a lottery ticket.

Moreover, the issuance and trading of derivatives ought to be at least as strictly regulated as that of stocks.

Fear feeds on itself, and the prediction that stocks will lose value becomes self fulfilling.

By buying government bonds for cash, a central bank can satisfy demand and push down the price of cash. When there is no excess demand for cash, there will be no excess supply of the bonds and stocks that underpin and finance the economy s productive capital.

By buying government bonds for cash, a central bank can satisfy demand and push down the price of cash.

Hungry for growth, the bank itself and a hedge fund founded by the bank invested in US subprime securities.

Often, securities are created that are backed by sophisticated portfolios containing good and bad assets whose true risk cannot easily be assessed.

Derivatives can serve many useful purposes, but they also contain hidden dangers.

Derivatives traded on exchanges should be registered as a class.

Inflation protected securities are now being sold at negative yields for the first time ever.

Banks issue securities with attractive nominal interest rates but unknown repayment probability.

During those months of political dithering, US treasuries became a riskier asset.

Surely there is at least as much natural demand for commodity bonds as there is for credit default swaps and some of the bizarrely complicated derivatives that are currently traded!

They will have no enforcement powers and national governments are already finding ways to undermine their authority and (financial) capacity.

Ordinary securities must be registered with the SEC before they can be traded.