Posted on 07/15/2008 3:22:18 PM PDT by SmithL
NEW YORK (Reuters) - Billionaire investor George Soros said on Monday that the crisis over Fannie Mae and Freddie Mac will not be the last, and noted that the broader credit meltdown will impact an already slowing U.S. economy.
The Treasury Department agreed to raise Fannie and Freddie's credit lines above the existing $2.25 billion apiece and buy shares to strengthen their finances, if needed. The Federal Reserve offered to let the mortgage finance companies borrow at the rate it charges banks for direct loans.
The government's aggressive move on Sunday underscored problems plaguing the markets and the potential for them to send the U.S. economy into a severe recession.
"This incident (with Fannie and Freddie) is not the last one," Soros told Reuters in a phone interview, adding the year-long global financial market turmoil represented "the most serious financial crisis of our lifetime."
"Freddie Mac and Fannie Mae have a solvency crisis not a liquidity crisis," said Soros. "There's no problem in their borrowing. And in fact, insofar there is a problem, the Fed is there to provide the liquidity."
That said, both Fannie and Freddie are "extremely leveraged," he said. "The deterioration in the housing market, the foreclosures are going to cause losses which exceed their equity," said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992.
Fannie and Freddie shares rose as much as 30 percent in trading before the opening bell on Monday, but was unable to hold those gains throughout the session.
(Excerpt) Read more at reuters.com ...
Can’t argue with Soros when it comes to markets.
The master of manipulation should know.
Soros makes public statements like this only after he has taken a position in the market (which will benefit from his proclamations).
This is his track record.
I'd be happy to see the s.o.b. dancing the Tyburn Jig. Maybe he needs a little help.
Is that a prediction or a promise?
I wish this megalamaniac would just shut the hell up.
The fed announced yesterday they may, if needed buy shares. It follows that they must neutralize those evil short speculators. What a gift to those who took the chance and recently bought. The government guarantees profit!
Fannie and Freddie had not even published audited financial statements in a few years. They didn't even know what they had on the books. Anyone who could read a balance sheet could see this coming. The only fault in this case is the stupid people that decided the a government sponsored entity needed to be in the mortgage business
Soros is slime.
Yea, it sounds like a threat to me...
“The housing finance giants have counted government power brokers as board members and executive staff. Here, a look at key players, past and present.
Fannie Mae
James A. Johnson, former chairman and CEO: Aide to Vice President Walter Mondale; recently led Sen. Barack Obama’s vice-presidential search team
Jamie Gorelick, former vice chairwoman: Deputy attorney general under President Bill Clinton; former Defense Department general counsel; member of 9/11 Commission
Franklin D. Raines, former chairman and CEO: Budget director under Clinton
Thomas E. Donilon, former executive vice president: Former assistant secretary of state under Clinton; senior adviser to Michael Dukakis’ presidential campaign; national campaign coordinator for Walter Mondale’s presidential campaign; congressional liaison for President Jimmy Carter.
Robert B. Zoellick, former executive vice president: Former deputy secretary of state and U.S. Trade Representative under President George W. Bush; currently president of the World Bank
Louis J. Freeh, board member: Director of the FBI under Clinton; federal judge”
Good to see someone else is aware of how some of these pigs operate........I have to wonder why Chuck Schumer opened his fat mouth about Indy Mac bank......I’d like to know just how much he profited off that.....
I have no doubt that the compensation for public statements of ‘opinion’ by certain people in positions of power is both extensive, and well-hidden.
I can think of no city more corrupt than Wall St. & New York, except perhaps Washington DC.
“I have no doubt that the compensation for public statements of ‘opinion’ by certain people in positions of power is both extensive, and well-hidden.”
Yes - well hidden indeed - in numbered Swiss bank accounts or in blind trusts in the Caymans.......
Don’t get me started about Wall St. - my husband worked there for awhile........
The man needs another pie.
What in Hell is wrong with these people? Another "journalism school" graduate I guess.
In other news, dollars to donuts Soros shorted Mae & Mac bigtime in the recent past.
My guess is that Soros is loving every minute of this.
I read elsewhere where the chinese hold huge positions in the bonds and preferred stock of fannie and freddie so it looks like the common stockholders and the us taxpayers will make sure that the chinese don’t lose any of their investment.
Are you saying that nothing succeeds like success?
What a thought.
A lot of people just have a blinding hatred for the guy.
The truth of the matter is simple: guys like Soros have a very, very narrow area of expertise. In all other areas their opinions are no better than Joe down at the local diner.
I tend to listen to the guys with the expertise. That doesn’t mean “Joe” isn’t right, but the expertise carries a lot of weight.
That does not surprise me.
Soros is one of the guys with expertise. What I’m mostly getting from folks I know who work on Wall St is a kind of “deer in the headlights” fear.
My thought also.
This reminds me of the story of all the Al Qaeda leaders celebrating after the two planes hit the WTC, and there's Osama telling them to calm down, there are two more coming.
Commodity Trading Volatility = Making the trade:Putting up 5-10 per cent of the value as margin compared with 50 percent for stock purchases}
"Can't argue with Soros"
Back in 1992, Soros's hedge fund speculated against an overvalued British pound.(deja vu) That nation's central bank chose the brainless path of "defending" the currency and thereby depleted its reserves. The press began to call Soros "the man who broke the Bank of England." He began to believe it.
His conversion to the cause of financial socialism began as Congress refused to bailout Russia, and Soros's fund started bearing the weight of margin calls. Eventually, the losses would total $2 billion. His book ('98) admits that he burned up the phone-lines calling for governments to loot their taxpayers on his behalf, with additional panicked calls to central bankers and finance officials to pressure them into doing so.
Soros made the wrong bet, lost one of his shirts, and turned against capitalism. He believed himself to be the most powerful man in the world. It turned out that there is something more powerful, which is the market itself.
So Soros, the new poster child of the left, turns out to be nothing more than a disgruntled rich guy. - Inside Soros Daily Article by Llewellyn H. Rockwell, Jr.
"It is sort of a disease when you consider yourself some kind of god, the creator of everything," the New Oxford Review quotes him as observing.
SEC Declares War on Short-Selling, Rumors
the SEC has sent subpoenas to several hedge funds seeking trading and communications data on short-selling and options trading in the shares of Bear Stearns and Lehman Brothers, according to news reports.
Together with New York Stock Exchange Regulation Inc. and the Financial Industry Regulatory Authority, the SEC is also conducting "sweep examinations" in the securities industry focused on preventing the spread of intentionally false rumors aimed at manipulating securities prices.
The media has hyped the rumors, as have certain politicians (Schumer etc.) and are just as culperable.
Remember Cramer and "Trading with the Enemy"? and here aka source .
“They will lose their shirts if the government steps in and takes an equity position in the companies”
This is being badly misunderstood. The companies are going to print NEW shares for the government to buy at presumably dirt-cheap prices. Existing shareholders could be diluted horribly. This is great for shorts, if I am reading it correctly.
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