Late last year, the Fed announced that it would begin a cash for crap scheme. It would use crisply printed dollars to buy toxic mortgage backed securities, so long as they were guaranteed by Freddie Mac and Fannie Mae. The Fed wanted to use the scheme to prop up the housing market by increasing credit availability.
Four months into the scheme, and already things are beginning to spin out of control. The Fed has already purchased almost $300 billion of this rubbish.