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Econorama

The market rallied on the cut in the discount rate.

But this morning's business report included the news that First Magnus Financial Corp laid-off 6,000 of their 6,100 employees. First Magnus reportedly originated $30 billion of mortgages in 2006. Now, I don't know anything about them, or their employees. And, perhaps some of their brokers pushed some limits on customer applications - again, I don't know.

Magnus is suspending operations because there are no buyers willing to purchase their bundles of mortgages.

The talking heads on the Saturday morning financial television shows included many moaning that the Fed was bailing out wealthy hedge fund managers and the like with the lowering of the discount rate. Those talking heads are stupid. The Fed is smartly trying to prevent a recession, because if no one can sell their home, that is where we are heading....

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