>>Fed to bail out fraudsters.
The Fed Fraudsters, bailing out the Fannie Fraudsters.
Jupiter Island, Jekyll Island,
Gilliben's Island...
It's tough to tell them apart these days.
Posted on 09/06/2008 7:56:35 AM PDT by BenLurkin
The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives and prop them up financially, federal officials told the two companies yesterday, according to three sources familiar with the conversations.
Under the plan, which could prompt one of the most sweeping government interventions in the workings of financial markets in U.S. history, federal officials would place the firms under a conservatorship, a legal status giving the government the option and time to restructure and revive the companies, the sources said. The value of the companies' common stock would be diluted but not wiped out; while the holdings of other securities, including company debt and preferred shares might be protected by the government.
Instead of giving each company a big capital infusion up front, the government could make quarterly injections as the companies' losses warrant, the sources said. This would be an attempt to minimize the initial cost of the rescue.
The timing of government action remained unclear last night, and the final details were still under discussion. But as the pace of discussions accelerated, Treasury officials contacted senior congressional leaders yesterday, telling them they might be briefed on the plan this weekend and asking for telephone numbers where they could be reached.
The action would represent a major escalation of the government's role in private lending. The government would be assuming vast obligations it has historically disavowed, potentially using taxpayer money to make up for private business decisions gone wrong.
A bailout of the two mortgage finance titans would follow a Fed rescue of investment bank Bear Stearns in March and earlier steps to provide implicit government backing to Fannie Mae and Freddie Mac.
(Excerpt) Read more at msnbc.msn.com ...
We can’t allow a “private” company to go bankrupt.
I hear they plan to merge the two and rename it Feddie Pay, lol.
Fed to bail out fraudsters.
So where’s that “free market” Bush is always panting about?
What ever the plan, you can bet fat-cat pockets will be padded with our money.
Oh yes!
So, in effect, we the taxpayers are propping up these investments made by foreigners in our economy. You can say that's terrible and we hate foreigners and who cares anyway, but the alternative is no more foreign investment and then our government goes bankrupt when no one buys T-bills anymore because the government backing is worthless.
This is an ugly situation but the Federal Reserve Bank and the President's economists don't have any other recourse. The real culprits, obviously, are the managers of Fanny Mae and Freddy Mac who borrowed huge sums of money and used highly speculative assets as collateral. When the asset bubble burst they, and all of us, where left holding the bag.
Sub-prime mortgages indeed!
I think that most of the mortgage problem can be laid at the feet of Bill Clinton who pushed Congress to authorize a change in the asset/debt ratio of banks and pushed the banks to lend money to “low income” people so thay could enjoy ownership of their homes.
There are people who will never be really qualified to own a home, no matter how much money they make. They just don’t have the initiative to take care of whatever they do have. They just don’t get it.
Banks participated in the false values of the “appraisers” and realtors loved getting the higher commission.s
There is alot of blame to go around. It started with Clinton, IMO.
Sub-prime mortgages indeed!”
I think of them as the bastard children of “junk bonds”.
What part of JUNK didn’t they understand?
It seemed to them like a good bet at the time. Even if these sub-prime borrowers defaulted, they could repossess the property and sell it a profit. There was no risk, or so they thought, but this strategy only works when the market is going up. The rest, as they say, is history.
It was a huge gamble, it was risky as hell, and it was cynical in the extreme. Don't worry, though, the executives will keep their millions. Never trouble yourself about that.
Fascism by any other name still stinks.
Bend over .... you know it’s coming.
Socializing losses, privatizing profits.
I hope we are going to get back the millions of dollars paid to the prior, grossly overpaid, dead-beat management.
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