Libertarian ping! To be added or removed freepmail me or post a message here.
Posted on 07/10/2008 9:33:59 AM PDT by BGHater
Fears about Fannie Mae and Freddie Mac retreated somewhat Tuesday after their federal regulator, OFHEO Director James Lockhart, said new accounting rule changes should make "no difference in the risks of the two firms."
On Monday, Freddie and Fannie shares plummeted after a Lehman Brothers analyst said a new FASB rule could require the two firms to write-down as much as $75 billion.
Rather than the accounting rules, what's really got investors spooked is a growing realization the government will have to nationalize Fannie and Freddie, says Kevin Depew, executive editor of Minyanville.com.
The two mortgage lenders are simply too big to fail and too critical to the housing market, Depew says. Given Fannie and Freddie own or guarantee 50% of all housing debt, according to the WSJ, continued stress on their balance sheets means higher borrowing costs for the firms, and ultimately higher mortgage rates for individuals. It also means another round of write-downs for the battered financial sector generally, which owns a lot of Fannie and Freddie-backed paper.
But nationalizing the firms, each created by an act of Congress, would mean a wipeout for equity holders, who have already seen their holdings decimated in the past year.
(Excerpt) Read more at finance.yahoo.com ...
Alexander Hamilton, the first U.S. Treasurer comes to mind. He knew and stated when government and banks collude American would wake up homeless and penniless. He knew this because after the Revolution, our American currency was worth little when it was backed by little. He had to conduct controlled experiments and came to this conclusion by 1790. Our culture did not learn from the Great Depression but I sure did because I love history. My grandmother who passed five years ago gave me a simple but powerful thing to remember: “Never trust bankers, they love foreclosures”.
Socialist ‘fairness policies’ promoted by cheap money by ‘too big to fail’ banks in real-estate was the same cause of the Great Depression. Now here we are again, the socialists are going to bail us out just like the Great Depression right? Thank Emporer Hirohito and Adolph Hitler for ending the Great Depression.
But the good news is by the end of it all in 1946, the Roaring Twenties crowd (my grandmother was one of them!) had become the Greatest Generation and we had 50 years of wonderful leadership.
Doesn’t mean I look forward to rebuilding and especially knowing the top 1% of the nations selfish got to fleece us, force us to do the heavy lifting while chuckling in there indoor tennis courts, but it does mean we get to throw the bums out and start a new era of prosperity.
Running a business to try and make a living these days and seeing this repeat of history is like Chinese water torture. Let’s get this over with, stop trying to fund the inevitable U.S. government and get the hell out of the way for the innovators and responsible to step up!!!! As a sidenote, as a data guy I am keeping some historical names and law passage/repeals, money guys and others directly involved in this fleecing, so they get know where to run and hide globally to avoid culpability by the stupid masses with short memories.
You know what’s up. Glad there are others with a knowledge of history. The tax rate is going to go through the roof in a couple of years, crushing the already wobbly economy. The 97% of Americans without a golden parachute will have some nice food stamps and a one room EFFICIENT apartment, just like the socialists wanted for us. But in truth, we won’t take it lying down, now will we? Oh no, not this time. Some of us have resources and we will use them so we don’t have to wait for Emperor Hirohito to make his revived debut.
Not much different with credit swaps and derivatives on real estate from the i-Banks where a few became ‘too big to fail’ while co-mingling ordinary citizens deposits into there business.
Rumor has it, an i-Bank threatened the Fed Chairman that if the party stops, this i-Bank would offshore there entire operation making 200,000 depositers the responsibility of the FDIC. Great leadership these days, isn’t it? I will not name names, but you can probably guess who this was. If not, suffice to say it’s time to let the forest fire burn down the rotten trees and begin reseeding.
Human nature is cyclical as is history. Nothing is new under the sun in that regard, but on the same token, we must be prepared to help our neighbors because the remedy to this behavior is always painful and requires self-sacrifice.
We are the nation of the Boston Tea Party. The twin city empire of Washington and NYC have forgotten that recently. The left has done wonders in education cirriculum to change History that teaches real lessons on human behavor and protecting oneself from tyranny to Social Studies to teach people to be ‘sensitive’ to those poor misunderstood Palestinians. The house of cards always collapses and rebuilds based on how we are created which is survival of the fittest, you reap what you sow and the law of cause and effect.
“FRE/FNM might of survived, but they became the final destination dumping ground for all the toxic waste that banks were looking to unload. Its finally catching up with the system.”
Right, in other words the taxpayer has becoming the huge dumping ground to unload the risk and financial ruination whom of course had no say on this laws or repeals of safeguards. Calling it taxation without representation is an understatement. Meanwhile the reward went to the 1% of our populations wealthiest for there ‘financial innovations’. These types had best invest in security and fencing companies although many have already left the country to go invest in fertile grounds of emerging markets to continue to play in because the golden goose is now laying rotten eggs, being fleeced to the core. How sad indeed the joke of the devil is on the American people. But I assign some blame to the dumbed down masses as well, too lazy to bother to use that computer to Google something else besides Brittany Spears or stock charts.
Socialized banking owned by the masses by the masses
Socialized agriculture own by the masses by the masses
Perhaps it won’t be so bad for the next four years. I can stop working 14 hour days in my small business, smoke weed all day, bang some chicks without protection and eat Captain Crunch in my one bedroom flat. The government will fully endorse my behavior and continue taxing the responsible. It could be true progress after all taking place.
Cuba I hear is a nice place to live. You only put in 4 hours of production and take siestas the other 4. The scenery is beautiful and the Castro’s benevolent. Seems our Democratic leadership love the likes of the Castro and Chavez, such an easy working plan to adopt if you run the government and you get all the perks and glory from the serfs!
I guess it doesn’t occur to them our military won’t go along with this like in those nations but the Dems will sure try anyway! Guess they don’t realize you have to throw a bone to your military and speak kindly of them once in awhile to accomplish a communist agenda.
The sky is not falling in everyone's world.
Thankfully, people go about there business and stuff still gets done.
“Too big to fail” applies uniquely to financial concerns because of the threat of system failure. When a large financial firm collapses its assets get dumped on the market all at once, driving down asset values at other banks. This can have a cascading effect and bring down firms that would otherwise be stable.
In the early 30s a full one third of American banks collapsed and it was this, not the stock market collapse, that did the real damage of the Depression. Fed and Treasury officials have this in mind. No one knows if we could have a repeat of the Great Depression, but no one wants to sit back and find out.
“Not much different with credit swaps and derivatives on real estate from the i-Banks where a few became ‘too big to fail’ while co-mingling ordinary citizens deposits into there business.”
The Glass-Steagall Act was being dismantled during the Clinton years. Now we are rediscovering why it was passed in the first place.
Libertarian ping! To be added or removed freepmail me or post a message here.
lol, too true.
You couldn't prove that by the number of commercials on TV for various and sundry companies offering mortgage loans. They may have more stringent rules than they did two years ago, but they certainly ARE lending money to folks who want to buy homes, or pull equity, if they have any, out of the one they own now.
Where is the authority in the constitution for welfare, social security, medicare, section 8 housing, LIHEAP, etc?
This is now The American Way!
Being responsible is an irrational path... And now that the incentives have been set for people to act irresponsibly, is it any wonder we are in decline?
Pay your employees outrageous salaries and give into outrageous union demands...if your business fails, the governmentAmerican taxpayers will bail you out.
Buy a big house...if you can't afford the mortgage, the governmentAmerican taxpayers will bail you out.
Make lots of overleveraged investments...if you can't cover them, the governmentAmerican taxpayers will bail you out.
Have lots of babies...if you can't afford them, the governmentAmerican taxpayers will bail you out.
Build in a floodplain...if it floods, the governmentAmerican taxpayers will bail you out.
etc.
I'm sick of paying for others.
Constitution? Do we have one of those?
The Axis didn't win...but we sure lost, too.
Why, that would be like ending the levy of a fine on anyone who doesn't do what the government wants! How dare you suggest the Constitution doesn't have a Social Engineering section!
Next you'll be going off the deep end and suggesting that infertile couples not be penalized and taxed at a higher rate than a couple with the same income who makes the choice (and is able) to have a kid!
Why, you sound like you want to take us back to days of sanity!
Yes comrade, it warms, how you say....cockles of heart.
I’m referring to loans between investment banks, hedge funds, etc. Loans used for leverage on trading/investing operations.
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