Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 10:44 pm

Yes, this from the Administration that helped make it impossible, almost, for the average citizen to climb out of a financial hole. This from an Administration that said it didn't want to help homeowners recover from the Sub Prime fiasco.

Bush wants to bail out Freddie Mac and Fannie Mae. Just breaking on CNN.com.

http://www.cnn.com/index.aol.html

Shows again that the GOP is more interested in the rich, banks and corporations than people. Well, let both have a taste of what the average American has under this crowd-let 'em drown.
Work Right, Fly Hard
 
Kent350787
Posts: 853
Joined: Wed May 28, 2008 12:06 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 10:58 pm

After getting over the shock that two companies with such silly names as Freddie Mac and Fannie Mae hold half of all mortgages in the US ($5trillion) (Eventually googled them and found that they used to have real names.)

Can you imagine the financial crisis in a US already heading well into recession if even one of these two companies collapsed? And the potential global impact.

I'm no GWB fan (what's the polar opposite?  Smile ) but such a move just makes sense....

Kent
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:01 pm



Quoting Falcon84 (Thread starter):
Bush wants to bail out Freddie Mac and Fannie Mae.

So what's your proposal? Let them collapse?
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:21 pm



Quoting HuskyAviation (Reply 2):
So what's your proposal? Let them collapse?

Well, they got themselves into this mess, if they can't get themselves out, too bad.

Isn't that what the conservatives always say about people who are over their head in credit card debt? The people who bought a sub prime mortgage? If they can't keep control of their own house, why should I bail them out, with my tax payers money?

Get the drift? Bush and Co. made it tougher for the average joe to get "bailed out" when his/her finances have gotten out of hand. Didn't want to help people suckered by Sub Prime, but he's sure willing to bail out a big financial institution.

Why play different ball in this case?
Work Right, Fly Hard
 
photopilot
Posts: 3075
Joined: Mon Jul 15, 2002 11:16 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:22 pm



Quoting HuskyAviation (Reply 2):
So what's your proposal? Let them collapse?

Absolutely.

The average American has lived with a false sense of entitlement for so long that the entire country needs a very rude, very drastic wake-up call. You have to learn to live WITHIN YOUR MEANS.

For far too long the USA has consumed the world's energy, borrowed heavily, run up a virtually unpayably foreign debt, lived on credit cards or "home equity" and believed that the debt would never be called.

Personally, I think the IMF needs to come into the states (just like they did to Argentina and so many other countries) and institute an austerity budget WITHOUT A DEFECIT and teach Americans to live within their means.

It's shockingly stupid to think that a country with so much potential is so far in debt (individually and collectively) and has the one of the lowest per capita savings rates of the Industrialised world.

Wake up USA, it's time for your painfull lesson.
 
MaidensGator
Posts: 848
Joined: Fri Jan 12, 2007 12:02 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:24 pm



Quoting Falcon84 (Thread starter):
Yes, this from the Administration that helped make it impossible, almost, for the average citizen to climb out of a financial hole.

I hate to break it to you Falcon, but the average citizen doesn't need to climb out of a financial hole...  Cool
The first thing we do, let's kill all the lawyers.
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:32 pm



Quoting Photopilot (Reply 4):
The average American has lived with a false sense of entitlement for so long that the entire country needs a very rude, very drastic wake-up call. You have to learn to live WITHIN YOUR MEANS.

Isn't that what the GOP Congress was saying, when it slapped the Banking Reform on the American people? Never mind that it gave billions to the banks in the process. It made it harder to get out of bankruptcy; it doubled minimum payments. Yet now, the same President who signed that wants to spend billions to send the direct opposite message in this case.

The Dems should tell the president "You want to do this, fine. You'll sign the bill we pass. In it, we'll also take away the stuff that made it almost impossible for Americans to get out of debt with the Banking Reform bill. We'll scratch your back, Mr. President, if you scratch ours."

Quoting MaidensGator (Reply 5):
I hate to break it to you Falcon, but the average citizen doesn't need to climb out of a financial hole...

Actually, MaidensGator, but most average citizens in the U.S. ARE in a financial hole, when it comes to being in debt up to their freaking ears.

My wife and I just dug out of it-by borrowing against my retirement, using funds in my 401k, paying myself back with interest. Not everyone can do that. So, as usual, you have it all wrong.
Work Right, Fly Hard
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:36 pm



Quoting Falcon84 (Reply 3):
Well, they got themselves into this mess, if they can't get themselves out, too bad.

Isn't that what the conservatives always say about people who are over their head in credit card debt? The people who bought a sub prime mortgage? If they can't keep control of their own house, why should I bail them out, with my tax payers money?

Get the drift? Bush and Co. made it tougher for the average joe to get "bailed out" when his/her finances have gotten out of hand. Didn't want to help people suckered by Sub Prime, but he's sure willing to bail out a big financial institution.

Why play different ball in this case?

Because it's extremely narrowsighted and frankly, a little uninformed to simply look at this from a partisan political perspective.

This goes WAY beyond subprimes--Freddie and Fannie back a LOT more than just that, including a HUGE number of regular mortgages. If nothing is done to shore them up (and I'm not yet convinced they have reached that stage yet), you can forget about the "average guy" ever getting a mortgage again. Freddie and Fannie drive a great portion of the housing market: banks originate mortgage loans and then immediately sell them to Freddie and Fannie, which is what gives banks the liquidity to continue originating loans to new buyers (or in the alternative, Fannie and Freddie back those mortgages that the banks originate). If that capital flow gets cut off (we're talking trillions of dollars), the people that will really get hurt are the ones you speak of, the "average joe". So much money would get sucked out of the economy that you'd be better off keeping your money in your mattress.

Not to mention the fact that on the back end of this, if one or both of them were to fail, all the currently outstanding securities that Fannie and Freddie have sold (to raise the capital they need to pay the banks for the original mortgages) would then become practically worthless overnight. That's hundreds of billions of dollars down the drain. We're not talking about a mere ripple in the US economy or even a recession-causing event, we're talking a depression scenario, to put it mildly. You want that? I don't.
 
MaidensGator
Posts: 848
Joined: Fri Jan 12, 2007 12:02 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:37 pm



Quoting Falcon84 (Reply 6):
Quoting MaidensGator (Reply 5):
I hate to break it to you Falcon, but the average citizen doesn't need to climb out of a financial hole...

Actually, MaidensGator, but most average citizens in the U.S. ARE in a financial hole, when it comes to being in debt up to their freaking ears.

My wife and I just dug out of it-by borrowing against my retirement, using funds in my 401k, paying myself back with interest. Not everyone can do that. So, as usual, you have it all wrong.

While many people have overextended themselves, it is by no means a large enough percentage of the population to be considered average... Maybe you have some facts to contradict me, besides your personal situation?
The first thing we do, let's kill all the lawyers.
 
Cadet57
Posts: 7174
Joined: Mon Jul 25, 2005 2:02 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Sun Jul 13, 2008 11:41 pm



Quoting Falcon84 (Reply 6):
Actually, MaidensGator, but most average citizens in the U.S. ARE in a financial hole, when it comes to being in debt up to their freaking ears.

Can you produce some numbers that show most average citizens are in debt? Furthermore what is you definiton of debt? I have about 1700 total left on my credit cards but At my current payment of 50 a week It'll be paid down in about 8 months. So by march of 09 I'll be credit card free. A great feeling. Next is my god forsaken student loans and my car for the next 4years.
Doors open, right hand side, next stop is Springfield.
 
QANTAS077
Posts: 5176
Joined: Wed Jan 14, 2004 5:08 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 12:16 am



Quoting HuskyAviation (Reply 2):
So what's your proposal? Let them collapse?

its not the business of government to bail out private companies which find themselves in trouble...

Quoting MaidensGator (Reply 5):
but the average citizen doesn't need to climb out of a financial hole...

but the average citizen from any country certainly knows how to bury themselves head deep in debt...its a tough job keeping up with the Jones'.  Smile

Quoting Falcon84 (Reply 3):
Well, they got themselves into this mess, if they can't get themselves out, too bad.

don't agree with you on much, but this I 110% agree with.
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 12:40 am



Quoting QANTAS077 (Reply 10):
its not the business of government to bail out private companies which find themselves in trouble...

Do some research then on the foundations of Freddie and Fannie. They aren't completely private companies; never have been.

Further, it is the business of the government to manage the economy to the extent that it can--it's been that way the better part of a century (at least in the US), so let's get past the laissez faire crap. Government regulates the economy all over the place, and that's not going to change. It is the responsibility of government to avoid a widespread global panic and financial disaster, which it can do by giving institutions time to fix problems, and by looking at current and proposed regulations to protect against this occurring in the future. Undoing this mess (which is not impossible, but it will be if Fannie or Freddie collapses) takes time--regulations don't go into effect overnight.

Quoting QANTAS077 (Reply 10):
but the average citizen from any country certainly knows how to bury themselves head deep in debt...its a tough job keeping up with the Jones'.

People need to stop obsessing themselves with the micro level (waaaaaaah! it's Joe Q. Public's fault!! He shouldn't have those credit cards!!!!)--this is occurring on a much higher macro level than most people understand (since they have no idea how these things are actually structured). There is a systemic liquidity problem right now in the financial system--and Fannie and Freddie going under would make it about 10 times worse. And guess what? If it all falls apart, the US would be taking most of the rest of the developed world with it. Where do you think a lot of the people buying securities issued by Fannie and Freddie (and other issuers) come from? Canada, Europe and Asia.
 
max550
Posts: 714
Joined: Tue Nov 13, 2007 9:46 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 12:44 am



Quoting Falcon84 (Reply 3):
Well, they got themselves into this mess, if they can't get themselves out, too bad.

I have to disagree with you, we can't let them fail.
I wish we could let them fail, since it's starting to look like you can run a company into the ground, make your money, and have the government take care of the mess you leave behind. But on the other hand, the government should be keeping track of what these companies are doing when they control so much of our money.
The Bush administration has decided that we should let them run themselves how they see fit and the market will take care of the rest. Unfortunately, that's not always how it works. Government isn't always bad. They need to provide some oversight of what these companies are doing so stuff like this doesn't happen anymore.
 
roadrunner165
Posts: 790
Joined: Sun Oct 15, 2000 6:28 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 1:14 am



Quoting Falcon84 (Reply 3):
Well, they got themselves into this mess, if they can't get themselves out, too bad.

This will result in an economic depression, and that is not good for anyone.

Adam
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 1:24 am



Quoting HuskyAviation (Reply 7):
Because it's extremely narrowsighted and frankly, a little uninformed to simply look at this from a partisan political perspective.

I'm just putting the shoe on the other foot. When it comes to people-individuals-this Administration doesn't give a damn. But when it comes to big corporations, or financianl instiatutions, or the wealthy, the policy is "the more help we can give them, the better."

I am NOT advocating that they be allowed to fail. But I am trying to point out the hypocrisy of this Administration when it comes to how differently they treat the average Joe, and how they treat corproations like this.

I think, if anything, the government should stay out of it, except to try to facilitate other lending institutions in shoring up Mac and Mae. It shouldn't be our tax money doing it, but other lending and financial instiatutions.

But the hypocrisy of this Administration is just breathtaking, and I hope that's been pointed out.
Work Right, Fly Hard
 
User avatar
Aaron747
Posts: 8558
Joined: Thu Aug 07, 2003 2:07 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 1:46 am



Quoting HuskyAviation (Reply 2):

So what's your proposal? Let them collapse?

According to several respected economists, the impacts are not as dire as some would have you believe.

First, notice that the hit that bondholders will take will be limited in the absence of their bailout. With a debt/liabilities of about $5 trillion and expected insolvency – as of now and in the worst scenario of $200 to $300 billion – the necessary haircut is relatively modest: either a reduction in the face value of the claims of the order of 5% (if the mid-point hole is $250 billion) or – for unchanged face value – a very modest reduction in the interest rate on their debt after it has been forcibly restructured.

and further...

Fifth, a haircut on the debt of the GSEs does not need to destroy their business, the mortgage market or the housing market. The best debtor is a solvent debtor that has restructured and reduced its unsustainable debt burden: that is why firms coming out of a Chapter 11 process that reduces their debt burdens are viable businesses ready again to produce goods and services in a viable and profitable way. The worst thing that can happen to the GSEs is to remain as zombie comatose insolvent institutions whose debt burden is not restructured and who are barely propped by an implicit government lifeline. Do we really believe that GSEs with unrestructured debt kept alive in a zombie government “conservatorship” (the solution now most likely preferred by the U.S. administration) could function properly and continue their service of supporting the mortgage and housing market? Lets instead clean them up first and make them financially viable – after an out-of-court Chapter 11 style debt reduction – so as to ensure that they keep on providing the public goods that they are alleged to give.

The above are all comments from NYU's Nouriel Roubini, who has been right about almost everything that has unfolded the last five years.

In any case you are absolutely nuts if you believe further subsidization of US housing capital is either the right or wise thing to do.

William Buiter of the FT, another guy who has rarely been wrong the last few years, is far more scathing, now accusing Paulson and the rest of the current financial establishment as being guilty of fomenting a new direction in American socialism, for the rich and nobody else.

http://blogs.ft.com/maverecon/2008/0...nnie-and-freddie-charade/#more-279

There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.

Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican admininstrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions. Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
RJdxer
Posts: 3523
Joined: Thu Nov 09, 2006 1:14 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 2:00 am



Quoting HuskyAviation (Reply 11):
Do some research then on the foundations of Freddie and Fannie. They aren't completely private companies; never have been.

Not Falcons strong point. Let me help him yet again.

http://hnn.us/articles/1849.html

I don't expect you to change your opinion publicly Falcon but perhaps you'll understand the situation a little better. I don't know that dipping into your 401k was the best move but you are more keenly aware of your financial situation than any of us. I would like to see the numbers that says the average Joe is coming apart at the seams financially. I still maintain that it is buyer beware when buying anything be it an orange at the grocery story or a home mortgage. No one put a gun to anyone's head and made them sign on the dotted line.
Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 2:26 am



Quoting Aaron747 (Reply 15):
First, notice that the hit that bondholders will take will be limited in the absence of their bailout. With a debt/liabilities of about $5 trillion and expected insolvency – as of now and in the worst scenario of $200 to $300 billion – the necessary haircut is relatively modest: either a reduction in the face value of the claims of the order of 5% (if the mid-point hole is $250 billion) or – for unchanged face value – a very modest reduction in the interest rate on their debt after it has been forcibly restructured.

Which says nothing about mark-to-market value of those securities--or what will happen to the secondary market of those securities. The ability of those institutions to continue funding--and securitization is the only way any large institution can continue to fund itself when issuing large amounts of credit to other institutions or to individual borrowers--will become very limited, as the perceived risk of those securities either (1) makes it too expensive for the institution to issue securities because the interest rates they pay are too high, or (2) investors won't buy them because the historical performance in the secondary markets is crap. Once they go into bankruptcy, there is no going back.

Quoting Aaron747 (Reply 15):
There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.

Explain to me how having private markets funneling liquidity into the system is subsidization.
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 2:41 am



Quoting RJdxer (Reply 16):
I don't know that dipping into your 401k was the best move but you are more keenly aware of your financial situation

No, you don't know. But I'd rather pay myself back at 5% interest, than Chase, or MBNA, or any of those other companies at anywhere from 15% upward, and get myself out under those credit cards, be able to pay down our remaining debt faster, and have some room to breath financially.

Some will say "yes, but you're borrowing from your retirement." Yes, but it'd be nice to make it there first.....
Work Right, Fly Hard
 
User avatar
Aaron747
Posts: 8558
Joined: Thu Aug 07, 2003 2:07 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 2:42 am

Quoting HuskyAviation (Reply 17):
The ability of those institutions to continue funding--and securitization is the only way any large institution can continue to fund itself when issuing large amounts of credit to other institutions or to individual borrowers--will become very limited, as the perceived risk of those securities either (1) makes it too expensive for the institution to issue securities because the interest rates they pay are too high

I fundamentally agree and for the American system to have any kind of credit reliability, your cited number 1 is exactly what would be an ideal result of this. There has been an incredible institutional push toward homeownership and the facilitation thereof over the last few decades that has been unsustainable in the pace and scope by which it has been carried out. A protracted period of high interest rates that make borrowing untenable for a larger proportion of prospective borrowers is precisely the correction needed to get everything back on sound footing.

Quoting HuskyAviation (Reply 17):

Explain to me how having private markets funneling liquidity into the system is subsidization.

Private market liquidity wouldn't be subsidization if it were the only market actor at work here, but backchannel actors like favoritism in the tax system and property tax assessment and valuation methodologies are very much an institutional basis that, by the way they operate, constitute a subsidy of housing's overall capitalization. To suggest that they aren't related to the availability of liquidity is nothing nice words allow for. This is only the tip of the iceberg as many well know - the practical control of that liquidity resting in the hands of institutions like Fannie Mae, subject to federal guarantees and protections, is also an offhand subsidy. Nowhere is it said that subsidization must be narrowly defined as merely transactional.

[Edited 2008-07-13 19:53:51]
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 2:49 am



Quoting Aaron747 (Reply 19):
if it were the only market actor



Quoting Aaron747 (Reply 19):
but backchannel actors

Get the "F" in there, Aaron.  Big grin
Work Right, Fly Hard
 
jcs17
Posts: 7376
Joined: Mon Jun 18, 2001 11:13 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:16 am

Oh Falcon, your hypocrisy knows no bounds. If this was a William Jefferson Clinton or a Barack Hussein Obama plan, you would be gushing and you know it (at the very least you would not care). After all, Freddie Mac and Fannie Mae represented what you loved... the government essentially giving money away to the "little guy," no matter what the consequences. Don't get me wrong, if you're left to getting a loan from Freddie Mac or Fannie Mae, you probably shouldn't be applying for it. Fannie Mae and Freddie Mac might be the smelliest thing to come out of Washington since a Georgetown law degree. I'm not even saying Bush should even bailing out these institutions, far from it, but this post is based in pure political BS.
America's chickens are coming home to rooooost!
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:56 am

Quoting Max550 (Reply 12):

I have to disagree with you, we can't let them fail.
I wish we could let them fail, since it's starting to look like you can run a company into the ground, make your money, and have the government take care of the mess you leave behind. But on the other hand, the government should be keeping track of what these companies are doing when they control so much of our money.
The Bush administration has decided that we should let them run themselves how they see fit and the market will take care of the rest. Unfortunately, that's not always how it works. Government isn't always bad. They need to provide some oversight of what these companies are doing so stuff like this doesn't happen anymore.

They are GSEs, or government-sponsored enterprises. They were "privatized" some time ago but still have many government benefits (lines of credit) and government goals. Click here to understand the fiasco.

Greenspan (February 2004) quote:

Quote:
Because Fannie and Freddie can borrow at a subsidized rate, they have been able to pay higher prices to originators for their mortgages than can potential competitors and to gradually but inexorably take over the market for conforming mortgages. This process has provided Fannie and Freddie with a powerful vehicle and incentive for achieving extremely rapid growth of their balance sheets. The resultant scale gives Fannie and Freddie additional advantages that potential private-sector competitors cannot overcome. Importantly, the scale itself has reinforced investors' perceptions that, in the event of a crisis involving Fannie and Freddie, policymakers would have little alternative than to have the taxpayers explicitly stand behind the GSE debt. This view is widespread in the marketplace despite the privatization of Fannie and Freddie and their control by private shareholders, because these institutions continue to have government missions, a line of credit with the Treasury, and other government benefits, which confer upon them a special status in the eyes of many investors.

This explains the absurdity pointed out by Kent in reply #1, that only two companies hold more than half of all mortgages in the U.S.

[Edited 2008-07-13 21:59:04]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
DocLightning
Posts: 19821
Joined: Wed Nov 16, 2005 8:51 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:11 am



Quoting Photopilot (Reply 4):
The average American has lived with a false sense of entitlement for so long that the entire country needs a very rude, very drastic wake-up call. You have to learn to live WITHIN YOUR MEANS.

That means that essentially NOBODY can go to college. Because most student loans? Freddie and Fannie.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
User avatar
Aaron747
Posts: 8558
Joined: Thu Aug 07, 2003 2:07 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:20 am



Quoting DocLightning (Reply 23):

That means that essentially NOBODY can go to college. Because most student loans? Freddie and Fannie.

Bullshit. Other loan providers will gladly step in, especially if they have better secure lines of credit than government dinosaurs. In any case the rising cost of college is another serious issue that Americans need to confront - namely the fact that students and alumni don't complain enough about the staggering rise in university administrative expenses despite relatively low growth in program costs and educator salaries. Why these expenses are passed to the students rather than corporate and NGO beneficiaries of university services is anyone's guess but it's criminal any way you slice it when endowments and alumni giving are better than they've ever been and just about every uni President's office claims budget pressure each and every year.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
User avatar
DocLightning
Posts: 19821
Joined: Wed Nov 16, 2005 8:51 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:24 am



Quoting Aaron747 (Reply 24):
Bullshit. Other loan providers will gladly step in, especially if they have better secure lines of credit than government dinosaurs. In any case the rising cost of college is another serious issue that Americans need to confront - namely the fact that students and alumni don't complain enough about the staggering rise in university administrative expenses despite relatively low growth in program costs and educator salaries

In my opinion, every American should be entitled to four years of full-time higher education for free. That should go under a "Free and public education."

But no, that would be "socialist."
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:38 am



Quoting DocLightning (Reply 23):

That means that essentially NOBODY can go to college. Because most student loans? Freddie and Fannie.

Subsidized, government-guaranteed student loans? Maybe that's why tuition costs are sky-rocketing, just like housing was. You'd think that the rising prices would mean less students going to college, but the exact opposite has happened from my observation, even while the economy stumbles.

Perhaps another bubble brewing?
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
Pyrex
Posts: 4051
Joined: Thu Aug 25, 2005 7:24 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 6:21 am



Quoting Falcon84 (Thread starter):
Well, let both have a taste of what the average American has under this crowd-let 'em drown.

Sure, let them drown. And then you will have what Japan has, mamooth banks with flimsy balance sheets and no growth for 20 years. If you want a "lost generation" go right ahead.

Quoting Falcon84 (Reply 3):
Well, they got themselves into this mess, if they can't get themselves out, too bad.

Actually, no. Fannie and Freddie were highly regulated in the terms of the loans they could guarantee. The mortgage meltdown created by the other players in the industry has come to bite them in the ass even though they weren't the ones acting recklessly.

Quoting DocLightning (Reply 23):
Because most student loans? Freddie and Fannie.

Sallie (Mae), but point taken.

Quoting DocLightning (Reply 25):
In my opinion, every American should be entitled to four years of full-time higher education for free.

Even the slacker who cruised through high-school without studying a single bit?
Read this very carefully, I shall write this only once!
 
User avatar
Aaron747
Posts: 8558
Joined: Thu Aug 07, 2003 2:07 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 6:26 am



Quoting Pyrex (Reply 27):
And then you will have what Japan has, mamooth banks with flimsy balance sheets and no growth for 20 years.

Just to set the record straight, we have mammoth Japanese banks today because nonperforming loans were never permitted to default and small business survival was put ahead of good fiscal governance. Let's not even get started on financing of wasteful public infrastructure projects and subsidization of a no-return agricultural sector.

As for Japan having no growth, there are some reasons related to bank performance for this but the blame lies mostly with a protectionist corporate and private mindset adverse to allowing foreign investment and terrible government policy with regard to employment practices and soaring corporate taxes.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 12:46 pm



Quoting JCS17 (Reply 21):
If this was a William Jefferson Clinton or a Barack Hussein Obama plan, you would be gushing and you know it

Actually, I would not. I think it's wrong-headed to get the goverment involved in this. Facilitating other private companies to invest in them is one thing, but for our taxpayer money to go and bail them out for their own bad decisions? That's another thing entirely, Jcs.

And, again, I do NOT want them to go under, but underscoring the hypocrisy of this Administraiton in the way it dismisses, seemingly out of hand, the plight of individuals, while rushing at warp speed to save companies like Bear Sterns and now Mac and Mae, has to be pointed out.

And I KNOW you'd be against it if it were done by Mr. Clinton or Mr. Obama. I know it without even having to think about it.

Quoting JCS17 (Reply 21):
Don't get me wrong, if you're left to getting a loan from Freddie Mac or Fannie Mae, you probably shouldn't be applying for it.

I rest my case.  Yeah sure

Quoting JCS17 (Reply 21):
I'm not even saying Bush should even bailing out these institutions, far from it, but this post is based in pure political BS.

Whatever. LIke I give a rats ass what a frat boy thinks.
Work Right, Fly Hard
 
RJdxer
Posts: 3523
Joined: Thu Nov 09, 2006 1:14 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 1:48 pm



Quoting Falcon84 (Reply 29):
but for our taxpayer money to go and bail them out for their own bad decisions?

Well just in case you missed it in the several times it's been presented here, Fannie Mae and Freddie Mac are insured by the government. No matter how you slice it the government was going to have to bail them out. This administration isn't doing anything that any other administration wouldn't have to do so I don't quite see your point. IndyMac failed the other day and the government is stepping in to take care of accounts with 100k or less in them, as the FDIC has always promised they would. I'm sure in your mind if the administration could find some loophole to avoid having to take care of the little people they would.  faint  BTW the IndyMac crisis was caused in part by our good friend Sen. Chuck Schumer (D) who helped cause a run on the bank.

http://www.iht.com/articles/2008/07/13/business/indy.php

7200 people are out of a job in large part thanks to the Senator and his big mouth. So where is your condemnation of him?  eyebrow 

Quoting Falcon84 (Reply 29):
I rest my case.

I don't know what case you are resting since the point he was making is that if you are left to a jumbo or other type of creative financing perhaps that ought to be an indication that you don't qualify for the home you are looking at and should lower your horizons somewhat. That would be buyer responsibility. You know, the little guy not making bad personal choices. But then they never do that do they? It's just the conniving evil lenders who tricked all these folks into mortgages they couldn't afford right? Da debil made dem sign dat line.
Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 3:42 pm



Quoting RJdxer (Reply 30):
Well just in case you missed it in the several times it's been presented here, Fannie Mae and Freddie Mac are insured by the government.

So are all banks, Sherlock.

Quoting RJdxer (Reply 30):
y case.

I don't know what case you are resting

Then why don't you try not to comment, and embarrass yourself then? Or, is it the fact that I posted, you automatically, like Pavlov's famous dog, have a need to reply, even if it's not meanta for you?
Work Right, Fly Hard
 
SlamClick
Posts: 9576
Joined: Sun Nov 23, 2003 7:09 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 3:56 pm



Quoting Falcon84 (Reply 29):
underscoring the hypocrisy of this Administraiton in the way it dismisses, seemingly out of hand, the plight of individuals, while rushing at warp speed to save companies like Bear Sterns and now Mac and Mae, has to be pointed out.

As does the fact that ANY hardship encountered by any large financial institution will immediately be passed directly on to "individuals" like you and me. As much as it turns my stomach to watch this process, it does in fact benefit individuals too.

Perhaps your 401(k) didn't take the same hit mine did when Janet Reno attacked Microsoft for being (the greatest irony in my lifetime) too big and arrogant, and abusing their power.

Below is a picture of Janet Reno's staff showing us PROPER use of power:
Happiness is not seeing another trite Ste. Maarten photo all week long.
 
Falcon84
Topic Author
Posts: 13775
Joined: Fri Sep 10, 2004 11:52 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:05 pm



Quoting SlamClick (Reply 32):
ps your 401(k) didn't take the same hit mine did when Janet Reno attacked Microsoft for being (the greatest irony in my lifetime) too big and arrogant, and abusing their power.

My 401k lost about $2000 just before I took the loan, becuase of the doldrums the stock market is in. Meaning I could another $1000 out of it if I could have gotten to it faster.

As for the picture, SlamClick, get the hell over it. It happened a decade ago, and, whether you like it or not, 1. doesn't belong on this topic, and 2. was the right thing to do. And I don't recall anyone getting hurt or killed in that incident, anyway. All that happened was (GASP!), a little boy was reunited with his father after being held prisoner by people he didn't know.
Work Right, Fly Hard
 
RJdxer
Posts: 3523
Joined: Thu Nov 09, 2006 1:14 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:07 pm



Quoting Falcon84 (Reply 31):
So are all banks, Sherlock.

Incorrect. depositers of banks, with individual deposits up to 100k are insured by the government, not the bank itself. Fannie Mae and Freddie Mac are public/private corporations. The entire institution is insured by the federal government. The FDIC is not going to bail out IndyMac, they will protect the depositors with 100k or less in their accounts until the bank itself can be sold. Sure wish you would take the time to get your facts straight.
Warm winds blowing, heating blue skies, and a road that goes forever. I'm going to Texas!
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:14 pm



Quoting HuskyAviation (Reply 11):
People need to stop obsessing themselves with the micro level (waaaaaaah! it's Joe Q. Public's fault!! He shouldn't have those credit cards!!!!)--this is occurring on a much higher macro level than most people understand (since they have no idea how these things are actually structured). There is a systemic liquidity problem right now in the financial system--and Fannie and Freddie going under would make it about 10 times worse. And guess what? If it all falls apart, the US would be taking most of the rest of the developed world with it.

Well some (probably most) outside the US have noticed that bugger ups in the US economy have a nasty habit of affecting us. Even though a goodly part of the Aus economy is now linked to China, Japan and S Korea, that still holds good (bad I mean at present) because of the financial tentacles.

Quoting Falcon84 (Reply 14):
But the hypocrisy of this Administration is just breathtaking, and I hope that's been pointed out.

Sure is. But the whole structure of the GSEs is so opaque that understanding it must be close to a full time job and not one I want to undertake. I would say they appear a bit like camels designed by a committee, except that camels might be expected to be more resistant to a drought than the FMs appears to be.

So nice to read something easier to grasp like:

Quoting Aaron747 (Reply 15):
In any case you are absolutely nuts if you believe further subsidization of US housing capital is either the right or wise thing to do.

It seems from this distance and knowing a bit about the capers in our mortgage market that ill-considered removal of regulations is having yet another run at wrecking those who did not benefit from the free for all. The trouble is separating out those who should not suffer from those who may well merit being strung up by the thumbs.

The inevitable end will be bailing out more of the unworthy to save both an opaque and inefficient system and a worse economic situation. I wonder if Congress can get any of the contras that someone suggested. Nice thought.

But in one of the sub-prime threads last year this was pretty much forecast, so at least the powers that be should have been ready if a.netters knew it would happen!
 
SlamClick
Posts: 9576
Joined: Sun Nov 23, 2003 7:09 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 4:19 pm



Quoting RJdxer (Reply 34):
with individual deposits up to 100k are insured by the government

With actual funds on hand to cover maybe a few cents per thousand dollars. The FDIC sticker in the bank window is the most effective part of that whole program.
Happiness is not seeing another trite Ste. Maarten photo all week long.
 
SlamClick
Posts: 9576
Joined: Sun Nov 23, 2003 7:09 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:26 pm

Quoting Falcon84 (Reply 33):
As for the picture, SlamClick, get the hell over it.

I am over it. I am SO over it. I am trying to get YOU over it. Your religious rhapsody over anything not Republican is getting really sad. Of course the Republican administration is corrupt. So are Democratic administrations. But you still have the orthodoxy, an unshakable fixation on the true faith, as it were.

Quoting Falcon84 (Reply 33):
It happened a decade ago

Ah, is that the cutoff?

So slavery is not the white man's original sin anymore? Good.
Israel has been there since 1948, case closed.
No country ever used an atomic bomb against another.
The few remaining Nazi war criminals? Come on home mein herr all is forgiven.
Just over three years 'til 9/11 never happened.

Quoting Falcon84 (Reply 33):
doesn't belong on this topic

Anything that might underscore the obvious truth that Government is NEVER going to fix ANYTHING might, arguably belong here.

Quoting Falcon84 (Reply 33):
was the right thing to do

That is but one of two major points of view. THAT does not belong in this topic.

Quoting Falcon84 (Reply 33):
And I don't recall anyone getting hurt or killed in that incident

No one was hurt. Do you think if I searched I might find where you have posted an opinion that having a gun thrust in your face might be damaging to your psyche? I'm only a heartless bastard conservative but I believe that little boy is terrified beyond words.

Quoting Falcon84 (Reply 33):
reunited with his father

He lived with his mother and her boyfriend before he left Cuba. He was five years old the last time he could have seen his father. I'll bet a hundred of anything you can name that he could not have picked his father out of a lineup.

Quoting Falcon84 (Reply 33):
held prisoner

Hyperbole! That would imply that it was against HIS will which you can't prove for a moment. He was withheld from the other party in the pictures, the one with the submachineguns.

Anyway, it still serves to illustrate the point. Government action is not going to solve the problem. There is no way you can make the case that he would have been harmed by allowing him to grow up in the US. This would never had happened if they had not challenged Janet Reno's power and majesty and that was all it was about; Janet had bigger balls than they did.

[Edited 2008-07-14 10:42:53]
Happiness is not seeing another trite Ste. Maarten photo all week long.
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:34 pm



Quoting Baroque (Reply 35):
It seems from this distance and knowing a bit about the capers in our mortgage market that ill-considered removal of regulations is having yet another run at wrecking those who did not benefit from the free for all.

For all of the talk about removal of regulations and such by the Bush administration, I'd like someone to please point me in a direction as to when and what they were. I know of no such action other than Bush's relatively slow response to the original subprime problem. Don't pretend that these market forces were invented by the Bush administration.

Quoting Baroque (Reply 35):
The inevitable end will be bailing out more of the unworthy to save both an opaque and inefficient system and a worse economic situation.

There are certainly flaws, but in general US corporations and institutions are subject to the most transparency of any regulatory regime in the world. Further, there are very few inefficiencies about the way capital is structured in the US; indeed some might argue that securities issuances have become so efficient that it has contributed to the problem.

Quoting JCS17 (Reply 21):
After all, Freddie Mac and Fannie Mae represented what you loved... the government essentially giving money away to the "little guy," no matter what the consequences. Don't get me wrong, if you're left to getting a loan from Freddie Mac or Fannie Mae, you probably shouldn't be applying for it.

Nonsense. You don't apply to Freddie or Fannie for a loan, and most mortgageholders probably have no idea if Freddie or Fannie (1) owns their loan or (2) guarantees it.

Quoting Aaron747 (Reply 19):
Private market liquidity wouldn't be subsidization if it were the only market actor at work here, but backchannel actors like favoritism in the tax system and property tax assessment and valuation methodologies are very much an institutional basis that, by the way they operate, constitute a subsidy of housing's overall capitalization.

My apologies, I misunderstood your earlier statement. Of course homeownership is subsidized; I was thinking in terms of much higher up the food chain, where the money begins to flow down from Freddie/Fannie--aside from the feds allowing those institutions (all financial institutions) to apply GAAP to off-balance sheet transactions and not have to carry capital against those assets moved off-balance sheet, I can't think of any other kind of subsidy.
 
GDB
Posts: 12653
Joined: Wed May 23, 2001 6:25 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:36 pm

While a serious situation, the names of these organisations have provided some mirth.
('Fannie' albeit spelt as 'Fanny' is a slang term for the female genitalia here).

But I do think that this, as well as other recent financial crisis, (including the Northern Rock bank in the UK), has demonstrated the extreme double standards of this sector.
The most vocal against regulation and government interference, yet who do they go crying to when THEY screw up badly. With effects far beyond themselves.
This holds true on this side of the Atlantic too.
The made in USA credit crunch has had serious effects over here too.

Really, help in all it's forms should only be provided with strings attached, that is once the dust settles a much stronger regulatory framework should be put in place to prevent a repeat.
Since they clearly cannot be trusted to regulate themselves.

Before the knee jerk cries of socialism, reforms post the 1929 crash allowed much more stable financial markets for over 40 years.
Which last time I looked, did not turn the US into any kind of socialist state.
The difficulty now is the more connected nature due to technology, of the markets, but preserving that in a tighter regulatory framework is not impossible given the will.

But one thing I will give the US credit for, they at least do very often properly punish serious corporate crime.
But as we've seen, that threat is clearly not enough, as well as plain non criminal screw ups, almost always due to the toxic mix of greed and hubris.
It's like trusting Amy Winehouse to stay sober.
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 5:50 pm



Quoting Falcon84 (Reply 3):

Well, they got themselves into this mess, if they can't get themselves out, too bad.

Here is the issue with Fannie Mae and Freddie Mac. They are federally backed corporations and have to get bailed out. We as taxpayers essentially insure all the mortgages in this country below a now grown amount of money, which means we have to prop these companies up or the Federal Treasury will be on the hook for the whole thing, which is not what we want.

Quoting MaidensGator (Reply 5):

I hate to break it to you Falcon, but the average citizen doesn't need to climb out of a financial hole...

The negative savings rate in this country says Falcon is right.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 6:21 pm



Quoting N1120A (Reply 40):
They are federally backed corporations and have to get bailed out.

They do not have to get bailed out, yet.

Quoting N1120A (Reply 40):
We as taxpayers essentially insure all the mortgages in this country below a now grown amount of money, which means we have to prop these companies up or the Federal Treasury will be on the hook for the whole thing, which is not what we want.

No. The Fed will not be on the hook for the whole thing--first of all, most of the money Fannie and Freddie generate does not come from the Fed--I believe their credit lines are only in the neighborhood of $2-3billion. Second, it is not known if the US Govt. would actually step in and back all of the outstanding securities issued by Fannie and Freddie. I know for a fact that Fannie and Freddie make disclosures to investors stating otherwise. Further, if the US Govt. did not step in (and let's be serious, we're talking about amounts reaching the trillions), if Fannie and Freddie were to go under, that would (almost certainly) cause an event of default under the principal documents governing their securitization programs. In that case, all of the outstanding principal and interest on those securities becomes immediately due and payable, and there is no way either the Fed or Fannie/Freddie's assets could ever cover those amounts. Investors would end up taking the biggest immediate hit, and then the economy as a whole would be crushed by the fact that the amount of money available for new mortgage origination would be drastically reduced.
 
MaidensGator
Posts: 848
Joined: Fri Jan 12, 2007 12:02 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 7:43 pm



Quoting N1120A (Reply 40):
Quoting MaidensGator (Reply 5):

I hate to break it to you Falcon, but the average citizen doesn't need to climb out of a financial hole...

The negative savings rate in this country says Falcon is right.

It means no such thing.

Suppose I have 100 grand in the bank, and earn 80 grand after taxes. But I spend 80,800 dollars. I have a negative savings rate of one percent, but I still have more than 99,000 in the bank and am nowhere near being in a financial hole.

Falcon on the other hand, owes 20 grand on credit cards and has nothing in the bank. He takes home the same 80,000 as me, pays 10,000 on the credit cards and sticks 800 in the bank. He's got a positive savings rate of one percent, and is still in the hole.

Statistics sound important, but to say a negative savings rate means the average citizen is in a financial hole is just naive...
The first thing we do, let's kill all the lawyers.
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 7:56 pm



Quoting HuskyAviation (Reply 38):

Quoting JCS17 (Reply 21):
After all, Freddie Mac and Fannie Mae represented what you loved... the government essentially giving money away to the "little guy," no matter what the consequences. Don't get me wrong, if you're left to getting a loan from Freddie Mac or Fannie Mae, you probably shouldn't be applying for it.

Nonsense. You don't apply to Freddie or Fannie for a loan, and most mortgageholders probably have no idea if Freddie or Fannie (1) owns their loan or (2) guarantees it.

As my Greenspan quote above said, ". . .these institutions continue to have government missions,". That government mission is to help out the little guy. It can't be for anything else.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 7:58 pm



Quoting HuskyAviation (Reply 41):
In that case, all of the outstanding principal and interest on those securities becomes immediately due and payable, and there is no way either the Fed or Fannie/Freddie's assets could ever cover those amounts. Investors would end up taking the biggest immediate hit, and then the economy as a whole would be crushed by the fact that the amount of money available for new mortgage origination would be drastically reduced.

Yet another reason that the government can't and wont let them fail.

Quoting MaidensGator (Reply 42):

Statistics sound important, but to say a negative savings rate means the average citizen is in a financial hole is just naive...

That isn't what I am talking about. It is the debt/asset ratio that is the problem.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
MaidensGator
Posts: 848
Joined: Fri Jan 12, 2007 12:02 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 9:08 pm



Quoting N1120A (Reply 44):
Quoting MaidensGator (Reply 42):

Statistics sound important, but to say a negative savings rate means the average citizen is in a financial hole is just naive...

That isn't what I am talking about. It is the debt/asset ratio that is the problem

You did say negative savings rate. And Falcon said average citizen.

I'm not trying to sugarcoat how the economy's doing, but the foreclosure rate that's in the news everyday is about one percent. That's way too high, but it shows that 99 percent of mortgages are NOT in foreclosure.
The first thing we do, let's kill all the lawyers.
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Mon Jul 14, 2008 9:08 pm



Quoting PPVRA (Reply 43):
As my Greenspan quote above said, ". . .these institutions continue to have government missions,". That government mission is to help out the little guy. It can't be for anything else.

They exist to help the little guy--they provide (as my colleague and I were just discussing) currently about 67% of all the cash right now used to finance new mortgage originations. That is helping the little guy--they wouldn't get a mortgage without the capital provided by Fannie and Freddie. But those institutions don't provide direct loans to individuals; that was never their purpose. They are actors on the secondary mortgage market.
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Tue Jul 15, 2008 2:46 am

Quoting HuskyAviation (Reply 46):

Ok, I get your point.

Quoting HuskyAviation (Reply 41):
there is no way either the Fed or Fannie/Freddie's assets could ever cover those amounts.

Well, some central banks have chosen to invest their assets into paper, which can easily be multiplied in value by a device invented by Gutenberg:


A man shows a new Zimbabwean note in May. It was replaced by 25-billion and 50-billion-dollar bills (worth a U.S. dollar). With printing slowed, a shortage has arisen.
http://www.latimes.com/news/printedi...-money14-2008jul14,0,6099597.story

Hopefully the U.S. Federal Reserve won't choose to continue inflationary policies. I don't see much of an alternative, however. It's gonna hurt one way or another, you might as well not destroy the dollar, as it would hurt whatever is still in one piece.

[Edited 2008-07-14 19:55:22]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
huskyaviation
Posts: 912
Joined: Mon Aug 27, 2007 4:38 am

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Tue Jul 15, 2008 11:41 am



Quoting PPVRA (Reply 47):
Well, some central banks have chosen to invest their assets into paper, which can easily be multiplied in value by a device invented by Gutenberg:

I'm waiting for someone to start a thread saying, "should I invest in Zimbabwean notes in case their currency strengthens?"  biggrin 
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Bush Wants To Bail Out Freddie MAC, Fannie Mae

Tue Jul 15, 2008 12:31 pm



Quoting HuskyAviation (Reply 48):
Quoting PPVRA (Reply 47):
Well, some central banks have chosen to invest their assets into paper, which can easily be multiplied in value by a device invented by Gutenberg:

I'm waiting for someone to start a thread saying, "should I invest in Zimbabwean notes in case their currency strengthens?"

With the surge in China these days, I think Gutenberg might have to move over, and I think the Indians are also pushing. That aside, you might be hot to trot HuskyA as the A dollar, otherwise known as the Pacific Peso rushes towards parity with the USD!!

You guys have got our local banks yielding very close to 10% on dividends after allowing for tax imputation. And still the shares are falling.

As a matter of curiosity, what was the effect of the changes of goals in 2004"
HUD's 2004 Regulation Increased the Housing Goals Levels for 2005-2008 and Created New Home Purchase Subgoals

HUD's 2004 Regulation implemented the following key changes to the housing goals for the years 2005-2008:

- The housing goal levels were increased significantly over the GSEs' housing goal levels for 2001-2004;

- The housing goal levels rise in nearly equal steps from year-to-year. This staging will allow the GSEs the time needed to adjust their business models to meet the required levels;

- The 2004 Regulation established new Home Purchase Subgoals under each of the housing goals, as discussed in paragraph B below.

Who is online

Users browsing this forum: Bing [Bot] and 6 guests