See article referenced in this piece from Denninger on Fannie, Freddie Holders Shouldn’t Assume Guarantee (Update4)
Posted on 03/06/2010 3:32:24 AM PST by combat_boots
Now this is interesting...
March 5 (Bloomberg) -- Fannie Mae and Freddie Mac bondholders shouldn’t assume the government will make them whole on their investments as Congress retools the companies, House Financial Services Committee Chairman Barney Frank said.
Heh, who's the biggest individual bondholder?
Mr. Bernanke, the bond market is on line #1!
Frank continues:
A “whole range” of options is being considered for investors in the two government-seized companies, “from paying nothing to a haircut to whatever,” said Frank, whose committee oversees Fannie Mae and Freddie Mac.
Nothing? You mean zero, zilch, bupkis?
That would be rich. After Bernanke stepped in and bought some $200 billion of their debt, to have it "marked to zero" would be the ultimate slap in The Fed's face for buying that which I have argued is impermissible under the law.
What an elegant solution to a difficult problem - "oops - tear 'em up jackass - you should have known better than to buy something that you weren't allowed to and was patently worthless!"
The irony of that outcome would be delicious. Yes, I know I'm dreaming here - or am I?
“Please don’t think this is federally guaranteed, I don’t think it is, I don’t think it should be, I don’t feel any obligation to bail you out,” Frank said. Congress will “certainly not” extend any new protections to bond and mortgage-security investors beyond what exists, Frank said.
Oh. You mean that the face of those prospectuses mean what they say? You mean this is real?
Uh, the market is kinda ignoring that right now, isn't it?
Yes, I think it is.
How about this for a clear statement?
“We’re not remaking Fannie and Freddie,” Frank said. “We’re going to start from scratch and do housing finance.”
Go ahead folks, keep buying. This is spelled "opportunity", thank you very much. Now please excuse me while I go put a few chips on "red."
PS: Why are these stocks still listed again?
See article referenced in this piece from Denninger on Fannie, Freddie Holders Shouldn’t Assume Guarantee (Update4)
PING
‘Words mean things’ bump.
NBC for David Gregory’s wife. Shhhhhhhhhhhh.
Too bad Frank and dodd will not spend the rest of their lives in jail for starting this mess years ago.
...and jail is precisely where they belong.
“Please don’t think this is federally guaranteed, I don’t think it is, I don’t think it should be, I don’t feel any obligation to bail you out,”
Barney Fwank will burn in the same circle of hell as Marie Antoinette when he is gone.
Can I use the usual explanation of the meaning of ASS-U-ME in reference to Barnek Frank and not be accused of what the current definition is of a ‘hate crime’?
Lemme see if there are any fannie or freddie bonds in my portfolio.
Those two should be swinging from the ends of ropes. IMHO
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