Feds seize fannie and freddie

@realjohnboy,

I agree; we're not even protecting the loss of banks guilty of the same "sins" as freddie and fannie. Bear Stearns was also "saved" by the feds that will end up costing taxpayers for their mismanagement. Some things have gone grossly wrong with the way our government operates, and it's not only about graft and federal crimes.

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@cicerone imposter,

c.i. wrote :

Quote:

Re: hamburger(Post 3391472)
Just be prepared for a very strong wave, because it will certainly drown some people.

if you have no chance of fighting it , you might as well enjoy the waves as they roll over you - perhaps i'm a fatalist .
when there is no escape left , i don't think it helps the human mind or body to just fight on .
perhaps the next wave will land you on the beach , giving you a chance to start over again - now i'm an optimist !
hbg

Quote:

Doris Day
Que Sera Sera

When I was just a little girl
I asked my mother, what will I be
Will I be pretty, will I be rich
Here's what she said to me.

Que Sera, Sera,
Whatever will be, will be
The future's not ours, to see
Que Sera, Sera
What will be, will be.

enjoy the sunset AND the sunrise !

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@cicerone imposter,

something??? the government of the people, by the people and for the people has been co opted by corporate interests. this has been obvious to anyone who has resisted the corporate propaganda for some time now. We lost a generation worth of time dealing with the problem when the university became corrupted, and the best and the brightest were subjected to corporate indoctrination there, judgment became clouded.

1 Reply

@hawkeye10,

Two posts on this from the wonderful Irvine Housing Blog -

www.irvinehousingblog.com

Quote:

How do you measure the impact of the decline? Five hundred twenty-five thousand Six hundred minutes? Is it measured in hundreds of thousands of dollars? Is it measured in the toll it is taking on families facing foreclosure? Is it measured in the lost opportunities of those trapped in their homes? Is it measured in the devastation to our economy or our banking system? How do you evaluate the real cost? I don't have answers to these questions; I don't believe that anyone does.

I have been watching the carnage in all financial markets recently with a curious fascination. I have never before seen deleveraging on such a massive scale. Recently the values of nearly every asset class has been declining: stocks, bonds, real estate, and commodities. This is happening because money is leaving all of these markets for the safe haven of cash. There is often an increase in saving and a curtailment of debt in a recession. This one is particularly interesting because it seems to be a classic "Minsky Moment" where deleveraging is forcing the sale of all assets -- even good ones -- to repay debts. This is monetary deflation in action. Cash is King again.

We are quickly seeing the end of the spring buying season. Instead of a rally, we have witnessed a brief flattening, a step on the staircase to market oblivion. What lies in front of us is the fall and winter both literally and figuratively. Prices will likely begin to fall again this autumn, and the winter months may see a very cold headwind. Now that the housing bailout bill has eliminated downpayment assistance programs, everyone is now required to have a downpayment. Also, the FHA raised its equity requirement from 3% to 3.5%. Since very few people were saving money during our failed experiment with 100% financing, demand -- as measured by dollars available from lenders to qualified buyers -- is going to plummet. The REO supply from the ARM resets and lower prices is going to continue to dump large quantities of must-sell inventory on the market. The stage is set for another equity crushing drop.

Quote:

This is the bottom line: Freddie Mac and Fannie Mae and insured billions of dollars in toxic mortgages. The losses on these mortgages will end up exceeding the amount of money these companies have. If these companies were to go out of business, the entire secondary mortgage market would collapse, and our real estate markets will be in turmoil as transaction volume would plummet from its already anemic levels. The government believes it has to take over these companies in order to have a secondary mortgage market. A government takeover means the taxpayers of the United States just became liable for all the losses on the bad loans insured by these two companies. When you pay your taxes, you are now paying for a portion of all the bad mortgages given to speculators, flippers, fraudsters and the like.

Thanks a lot, Republicans! Thanks for removing regulations! Thanks for not looking into the problems when YOU are responsible for overseeing the markets! Thanks for encouraging crazy loan types and discouraging punishment for those found abusing the system!

I wonder if any Conservative is prepared to admit the fact that more money has been pumped out of the federal coffers, into the financial system, then at any point in modern history. Under their watch, our government has been forcefully propping up 'free enterprise.' I hate that term. I wish Okie and others who throw it around a lot would admit, that without government assistance, our markets would have collapsed this year.

Cycloptichorn

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@cicerone imposter,

(Tak, since we don't have pm's I have to do this publically. I cordially invite you to join us for the 5th season of the mindless A2K NFL Pick-the-Winners game. You can find the details on A2K's Sports thread. We are up to 19 players. The usual gang. I hope you can join us. You, too, Cyclo and you other folks here. Takes about 5 minutes a week and no knowledge about football is required. I am back to running it this year after JPB gave me a season off).

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@realjohnboy,

Yeah, rjb, you're absolutely right about not having to have knowledge....LOL, cause I didn't do too badly last year, but I'll be gone most of October, November, and December this year, so I thought it's better to opt out while I'm ahead.

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Of the debt being bailed out by the taxpayers for Freddie and Fannie, is there any dollar amount being held by the Chinese government? I saw where they are saying "Thanks, but no thanks" to this bridge, but has that been the case all along?

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@realjohnboy,

Hmm, I like the pick 'ems, but after a missed week last season, I was out of the whole thing. Can't be bothered to keep up with it every week, and there are no more PMs to remind people either.

Cycloptichorn

1 Reply

@squinney,

Quote:

The Bush administration and the Federal Reserve announced an emergency rescue plan Sunday to bolster Fannie Mae and Freddie Mac, which hold or guarantee more than $5 trillion in mortgages " almost half of the nation's total.

Five trillion is about half of the country's GDP. We're in big trouble.

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@cicerone imposter,

that these organizations have 20% less than what they need to be solvent is not an unreasonable assumption, which puts that taxpayer bill at $1 trillion. Since we have pretty much maxed out our credit card charges to our kids and grand kids this will hurt big time.

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@cicerone imposter,

Dont worry people. Our democratic congress gave the Bush people the money and power to bail out any of the banks and lending institutions includeing the fanny and fredie mays. Probebly wont help the people that took out loans but the rich bankers will be covered. Remind me again why the democratic congress was better than the republican one. Ive forgotten.

1 Reply

@rabel22,

the more we look the more it looks like arguing dem/gop theory is pointless. At the end of the day all of the current players are in bed with the corporate interests with no longer any way to escape. theory is for the pr effort, trolling for votes, it is not actionable.

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@hawkeye10,

Well Hawkeye I have been saying that from the beginning of this election cycle. People hope for change which I have been doing for over 50 years. I seem to be in the minority in not believeing politicians who preach change. I have heard the change word for many of those 50 years and havent seen any yet. Well let me back up a bit. Bush has changed the US from a world power to a nation on the way down.

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@hawkeye10,

hawkeye has it right! That's the reason we're in big doodoo, because the feds will rescue all the banks that will begin to bleed bankruptcy; we're only at the beginning.

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@rabel22,

I have been saying it for well over a decade. Look at America's public schools, we have been talking about change since the sixties, been doing a lot of changing of the theory and school administration structure, but still the majority of our kids do not receive a good education. It is hard to argue that in all of this time there has been any improvement. How can this be???

I will tell you, it is because the majority will run their mouth about the need for change, will support call for change, but where the rubber meets the road and actual effort and sacrifice is required to get something done the American people disappear. Excuses of busyness coma flying, of how it is somebody else's job, blah, blah, blah.

We Americans get what we deserve.

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@squinney,

squinney wrote:

Of the debt being bailed out by the taxpayers for Freddie and Fannie, is there any dollar amount being held by the Chinese government? I saw where they are saying "Thanks, but no thanks" to this bridge, but has that been the case all along?

Let me take a whack at your question, squinney. Say that you and some of your Chinese friends went into your bank 6 or 12 months ago and bought CD's (Certificates of Deposits). A fixed rate of interest for a set amount of time.
Now those CD's are maturing and yall can roll them over or cash them in. Your choice. They won't take back the free toaster you got.
Freddie and Fannie (F&F) have a big problem. Yall are not rolling your CD's over. So F&F have to find new investors. And they can't find them now.
So the government is coming in and buying CD's that you and other folks don't want to renew.
Is it money lost? I don't know, but it is certainly is an expensive investment by the government.

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@Cycloptichorn,

Cycloptichorn wrote:

Hmm, I like the pick 'ems, but after a missed week last season, I was out of the whole thing. Can't be bothered to keep up with it every week, and there are no more PMs to remind people either.
The rules are set up such that you don't get penalized for missing a week or so.

Cycloptichorn

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@rabel22,

rabel, We're already way down - and out; but conservatives don't want to admit it. That's why they're willing to elect McSame and Palin for four more years to destroy what little we have left. The pundits are figuring 2.5 million families will be losing their homes this year, and we already know about the unemployment problem in our country which was published recently (6.1%).

1 Reply

@cicerone imposter,

I predict that the federal government's recent practice of throwing money it does not have (IOU"S) at the collapsing economic system in the attempt to prop it up will end soon, as the feds face up to the same problem that the rest of us now have, nobody with money believes that we are credit worthy...

1 Reply

@hawkeye10,

Quote:

The government’s planned takeover of Fannie Mae and Freddie Mac, expected to be announced on Sunday, came together after advisers poring over the companies’ books for the Treasury Department concluded that Freddie’s accounting methods had overstated its capital cushion, according to regulatory officials briefed on the matter

http://www.nytimes.com/2008/09/07/business/07fannie.html?_r=1&hp&oref=slogin

What, a barely supervised quasi government agency cooked the books??!! Who ever would have predicted such a thing?

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Feds seize fannie and freddie

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