Posted on 07/13/2008 3:31:33 PM PDT by Sleeping Freeper
U.S. rescues Fannie, Freddie Treasury Department raises credit line, has power to buy companies' stock. Fed will open discount-lending to two government-sponsored mortgage lenders. Paulson calls for new regulatory controls.
(Excerpt) Read more at marketwatch.com ...
True.
But whose going to jail for running these things as an ATM for politicians and resulting in putting us on the hook for 5 trillion (more) in debt?
Capitalism is not supposed to be the economics of 'moral hazard'. Things seem to be looking too much like the 'last days of Rome' and the Wiemar Republic.
I don’t get it... the price of gold hasn’t gone anywhere according to kitco.com...
For what it’s worth, I worked for Fannie Mae back in the early 80’s in their IT department, and I can tell you folks that even then, their headquarters building at 3900 Wisconsin Avenue NW was fit for a king, nothing was spared so far as decorations, paintings, furnishings, carpets, luncheons, dinners, and in the IT department?
A computer geek’s paradise, if we needed something, we always got it. Fannie Mae had one of the most state-of-the-art computer environments (Data General MV10000 systems and variants), that was when their MBS (Mortgage Backed Securities) really began expanding.
My impression then (and I’ve never seen anything to change that impression) is that Fannie Mae might not be a totally drunken sailor, but definitely has a snootful, and their spending habits demonstrate that consistently.
Just my .02
Calling for a PUBLIC AUDIT when multiple PUBLIC AUDITS are already widely available makes it sound like you haven’t a clue what you’re talking about. So don’t do that.
dodged a bullet for today
http://online.wsj.com/article/SB121603898437750725.html?mod=hps_us_whats_news
Freddie Auction Is Successful
After Treasury, Fed Pledge Aid
Freddie Mac’s auction of $3 billion of short-term debt Monday sold at better than expected prices as the offering was well received by investors. The fact that the auction was successful comes as a big sign of relief for investors in Freddie, sister Fannie Mae, as well as the market as a whole, as the likelihood is lowered that the ailing mortgage giants will fail.
The Fed earns money on the Treasuries it owns. This pays for its expenses and the excess goes to the Treasury. It really doesn’t ‘dish out truckloads of cash’, it manages the ratio of currency available to the banking system by buying and selling Treasuries. The bailouts it has arranged involve getting private sector firms to take over failing companies.
Well, I noticed more “new” twentys in the cash flowing around me lately.
Isn’t that the point?
Welcome Amero.
Yep. The share prices will go asymptotically to zero, but the debts will be underwritten by the taxpayer. Not because there is a legal requirement to do so, but because the world's financial system would collapse if the FM Ogres colossal debts were not honoured.
What you are seeing is the old bills being replaced by the new. Currency is an almost insignificant fraction of the money supply. The bulk is in savings or checking entries, or Treasury debt.
When the Fed ‘adds money’ to the banking system it does so by purchasing Treasuries, the result being an electronic entry on some bank’s account book. The Fed creates the cash to purchase the Treasuries - what it is doing is changing the form of money in the financial system from Treasury paper to cash. The size of the money supply is determined by Congress when it sets the limit on Treasury debt, although as cash it can expand greatly in the banking system due to fractional reserve lending. In theory the Fed could purchase all of the national debt, converting it to cash.
If so, how and what %?
Sure, but I also want an audit that shows the public why we are proposing to spend public money on a bailout...something that the last 10-k audit fails to show (insert historical reason here).
So: we need a public audit of Fannie Mae at this point in time.
It is a delusion, the idea that your own wealth is or ever can be independent of the prudence and success of other people.
This isn't remotely fixed.
Well then, the government won’t have any objection to paying off my mortgage for me? (bitter sarcasm)
It certainly appears that way, doesn’t it?
nothing, of course. But so what? There are two strategies for success: one prudent, one more risky. Prudence should be rewarded in small, tortoise-like fashion—else everything is pure risk.
And guess what? If everyone is forced into a choice between socialism, and pure-risk capitalism, guess what they’re gonna choose...
well, people in prosperous nations aren’t just going to accept having their wages debased just to adhere to market “freedom”. They’re not going to accept the argument that their wages should be competing with wages in Honduras just because “the market” says so.
They’ll choose socialism instead—or at least Keynesianism.
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