well that route means great depression right here right now
as they hold over half of our mortgages and embedded in so many other things...even ""safe" money market funds at risk if they go under.....
the rest of the market honestly is letting them go down faster than they otherwise would IMO due to the fact that they know the government has a blank check to keep them solvent
hardly anybody even if they have vested interests to save it....gonna pump money into a sinking ship now that they know it has a life preserver (the taxpayer)
as they hold over half of our mortgages and embedded in so many other things...even ""safe" money market funds at risk if they go under.....
the rest of the market honestly is letting them go down faster than they otherwise would IMO due to the fact that they know the government has a blank check to keep them solvent
hardly anybody even if they have vested interests to save it....gonna pump money into a sinking ship now that they know it has a life preserver (the taxpayer)
earlier in the week i think even yesterday treasury said nah we won't have to step in now they not
how quickly things change
--------------------------------------------
Fannie and Freddie crisis deepens
By James Politi in Washington and Saskia Scholtes in New York
Published: August 20 2008 19:23 Last updated: August 20 2008 19:23
The US Treasury on Wednesday backed away from assurances that it would not have to rescue Fannie Mae and Freddie Mac, as the crisis surrounding the mortgage groups deepened with their shares falling for a third day.
Although it was granted new powers to extend its credit lines to Fannie and Freddie and invest in their equity last month, the Treasury has been adamant it does not expect to have to make use of the new authority.
But on Wednesday, a Treasury spokeswoman declined to repeat that assurance. Instead, she said Treasury was “vigilantly” monitoring market developments and was “focused on efforts that will encourage market stability, mortgage availability and protecting the taxpayer”.
The shift in emphasis towards a more open-ended statement may not mean that the Treasury is close to intervening to save Fannie and Freddie, since government funds would still only be used as a last resort.
But it highlights the pressure facing Hank Paulson, US Treasury secretary, as he confronts the return of unease surrounding Fannie and Freddie. A rise in the companies' borrowing costs could translate into higher mortgage rates for prospective homebuyers, thereby prolonging the housing slump.
Treasury officials had hoped the strengthening of the government guarantee implied in the rescue plan would be enough to restore investor confidence.
“Hopes that making government support more explicit . . . would add stability have backfired as holders further down the capital structure have turned up the heat, eradicating value ahead of a potentially damaging capital infusion,” Richard Hofmann, analyst at CreditSights, said
Daniel Mudd, Fannie chief executive, said in a radio interview yesterday that his company had not asked the Treasury for help, nor had it been offered any, reiterating that the housing agency has more capital than it has ever had in its history.
Fannie and Freddie shares have fallen 32.49 and 37.09 per cent respectively since Monday, as investors have grown concerned about a government intervention that would dilute shareholders and could affect holders of the groups' preferred stock and subordinated debt issues.
Freddie's tumbling share price has also hamstrung the company's efforts to raise $5.5bn of new capital it promised to issue in May.
Copyright The Financial Times Limited 2008
how quickly things change
--------------------------------------------
Fannie and Freddie crisis deepens
By James Politi in Washington and Saskia Scholtes in New York
Published: August 20 2008 19:23 Last updated: August 20 2008 19:23
The US Treasury on Wednesday backed away from assurances that it would not have to rescue Fannie Mae and Freddie Mac, as the crisis surrounding the mortgage groups deepened with their shares falling for a third day.
Although it was granted new powers to extend its credit lines to Fannie and Freddie and invest in their equity last month, the Treasury has been adamant it does not expect to have to make use of the new authority.
But on Wednesday, a Treasury spokeswoman declined to repeat that assurance. Instead, she said Treasury was “vigilantly” monitoring market developments and was “focused on efforts that will encourage market stability, mortgage availability and protecting the taxpayer”.
The shift in emphasis towards a more open-ended statement may not mean that the Treasury is close to intervening to save Fannie and Freddie, since government funds would still only be used as a last resort.
But it highlights the pressure facing Hank Paulson, US Treasury secretary, as he confronts the return of unease surrounding Fannie and Freddie. A rise in the companies' borrowing costs could translate into higher mortgage rates for prospective homebuyers, thereby prolonging the housing slump.
Treasury officials had hoped the strengthening of the government guarantee implied in the rescue plan would be enough to restore investor confidence.
“Hopes that making government support more explicit . . . would add stability have backfired as holders further down the capital structure have turned up the heat, eradicating value ahead of a potentially damaging capital infusion,” Richard Hofmann, analyst at CreditSights, said
Daniel Mudd, Fannie chief executive, said in a radio interview yesterday that his company had not asked the Treasury for help, nor had it been offered any, reiterating that the housing agency has more capital than it has ever had in its history.
Fannie and Freddie shares have fallen 32.49 and 37.09 per cent respectively since Monday, as investors have grown concerned about a government intervention that would dilute shareholders and could affect holders of the groups' preferred stock and subordinated debt issues.
Freddie's tumbling share price has also hamstrung the company's efforts to raise $5.5bn of new capital it promised to issue in May.
Copyright The Financial Times Limited 2008
well kinda sorta
nationalization means that the entity you are talking about is on the government books and they control every aspect of it.....
just moving more towards the direction of straight up nationalization
as they will be forced to put taxpayer money at risk to fund their debt or buy preferred shares....that's the quasi part
http://www.nytimes.com/2008/08/20/business/20fannie.html?_r=1&ref=business&oref=slogin
“Paulson can play this game for as long as he wants, but the end is becoming visible,” said William H. Gross, the chief investment officer of Pimco, one of the nation’s largest money management firms, referring to the Treasury secretary, Henry M. Paulson Jr. “At some point, investors are going to say these companies are too big a risk to buy their debt, and that precipitates a self-fulfilling prophecy that ends up with the government having to step in.”
On Tuesday, Freddie Mac had to pay a steep premium on a $3 billion issuance of five-year debt. The company will pay an interest rate of 1.13 percentage points higher than the rate the federal government pays for comparable borrowing. Earlier this year, the premium was as low as 0.6 points, according to Bloomberg.
Even with Freddie Mac’s debt promising investors a rich return, overseas demand for the issuance was weaker than in the past. Asian investors bought about 30 percent of the debt, while Europeans took 10 percent, according to a person familiar with the offering. By comparison, for the 12 months leading up to July, Asian investors accounted for 36 percent of the company’s debt and Europeans held 15 percent, according to data released by Freddie Mac.
The Russian finance minister, Alexei Kudrin, told reporters in Moscow on Tuesday that Russia was still buying debt issued by Fannie Mae and Freddie Mac, but on a smaller scale.
Analysts and investors say the results of the debt sale on Tuesday are troubling. As the companies’ cost of borrowing rises, so do mortgage rates for homeowners, putting more pressure on the troubled housing market.
If borrowing costs remain elevated or rise further, policy makers could be forced to activate contingency plans for investing in or lending to the companies.
As a result, some investors are beginning to speculate about how those plans will materialize and who will benefit and suffer from government intervention.
One possibility, said Mr. Egan and Mr. Gross, is that a bailout will be prompted by further declines in the companies’ shares or when debt investors begin charging so much that the firms cannot make a profit.
“It won’t be a black and white event,” said Mr. Egan. “But what happened today indicates that things are getting much darker.”
Mr. Egan speculated that the government might guarantee a new issuance of company debt or preferred stock. Such a guarantee would entice investors and allow the companies to raise money for less.
Others, including Bert Ely, a financial consultant and long-time critic of the companies, say the best option is for policy makers to buy debt issued by the companies directly. Guaranteeing or buying shares in the companies, by contrast, could expose the government to big losses if more mortgages default.
“In the short term they want to avoid an equity investment, and if they can avoid doing that they will,” Mr. Ely said.
Investors said regardless of how the government acts, many stockholders will probably suffer in a bailout, and most will never recover from the steep declines of recent months. Bondholders, however, may benefit as the government vows to stand behind the companies’ obligations and the returns on bonds increase.
nationalization means that the entity you are talking about is on the government books and they control every aspect of it.....
just moving more towards the direction of straight up nationalization
as they will be forced to put taxpayer money at risk to fund their debt or buy preferred shares....that's the quasi part
http://www.nytimes.com/2008/08/20/business/20fannie.html?_r=1&ref=business&oref=slogin
“Paulson can play this game for as long as he wants, but the end is becoming visible,” said William H. Gross, the chief investment officer of Pimco, one of the nation’s largest money management firms, referring to the Treasury secretary, Henry M. Paulson Jr. “At some point, investors are going to say these companies are too big a risk to buy their debt, and that precipitates a self-fulfilling prophecy that ends up with the government having to step in.”
On Tuesday, Freddie Mac had to pay a steep premium on a $3 billion issuance of five-year debt. The company will pay an interest rate of 1.13 percentage points higher than the rate the federal government pays for comparable borrowing. Earlier this year, the premium was as low as 0.6 points, according to Bloomberg.
Even with Freddie Mac’s debt promising investors a rich return, overseas demand for the issuance was weaker than in the past. Asian investors bought about 30 percent of the debt, while Europeans took 10 percent, according to a person familiar with the offering. By comparison, for the 12 months leading up to July, Asian investors accounted for 36 percent of the company’s debt and Europeans held 15 percent, according to data released by Freddie Mac.
The Russian finance minister, Alexei Kudrin, told reporters in Moscow on Tuesday that Russia was still buying debt issued by Fannie Mae and Freddie Mac, but on a smaller scale.
Analysts and investors say the results of the debt sale on Tuesday are troubling. As the companies’ cost of borrowing rises, so do mortgage rates for homeowners, putting more pressure on the troubled housing market.
If borrowing costs remain elevated or rise further, policy makers could be forced to activate contingency plans for investing in or lending to the companies.
As a result, some investors are beginning to speculate about how those plans will materialize and who will benefit and suffer from government intervention.
One possibility, said Mr. Egan and Mr. Gross, is that a bailout will be prompted by further declines in the companies’ shares or when debt investors begin charging so much that the firms cannot make a profit.
“It won’t be a black and white event,” said Mr. Egan. “But what happened today indicates that things are getting much darker.”
Mr. Egan speculated that the government might guarantee a new issuance of company debt or preferred stock. Such a guarantee would entice investors and allow the companies to raise money for less.
Others, including Bert Ely, a financial consultant and long-time critic of the companies, say the best option is for policy makers to buy debt issued by the companies directly. Guaranteeing or buying shares in the companies, by contrast, could expose the government to big losses if more mortgages default.
“In the short term they want to avoid an equity investment, and if they can avoid doing that they will,” Mr. Ely said.
Investors said regardless of how the government acts, many stockholders will probably suffer in a bailout, and most will never recover from the steep declines of recent months. Bondholders, however, may benefit as the government vows to stand behind the companies’ obligations and the returns on bonds increase.
John McCain wants to abolish Fannie and Freddie.
John McCain has the right economic instincts and agrees with you, tizdoom.
gimme a fucking break so much of his past and former and current aids littered with fannie and freddie lobbying money
just stop it
he's an establishment whore just like um all
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Olympics Football Argentina vs Brazil Highlights
by sportizovideos
ope:
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Olympics Football Argentina vs Brazil Highlights
by sportizovideos
ope:Oh, I see, you don't believe him....because????
hno:And if the Blimp Revolution had succeeded, you don't think Ron Paul would have been forced to surround himself with the same "Washington insiders"?
One of the things a president gets to do -- and one of the BIG reasons to vote Republican no matter who's heading the ticket -- is appoint about 3,000 positions in the govt from his cabinet downward.
Trust me, it's a lot better for "conservatives" like you :missingte to have like-minded bureaucrats making day-to-day decisions on judicial appointments, energy, education, health care, military, economy etc. than it is to turn those decisions over to the 3,000 socialists Obama would appoint.
Fact is, with the Republican administration, there will be a handful of Ron Pauls in the administration, whereas with Obama, there will be nothing but Marxists from top to bottom.
What the hell do you nutty utopians want?
hno:Yes, Paulestinians, no matter how often you state the contrary, elections DO matter.
VOTE!
(Or, you can always cough up 5 B-I-L-L-I-O-N and start a serious 3rd party.)
:howdy:
and lets put the "straight talk express" facts out there as well
John McCain wants to save Fannie and Freddie
On a day where the Dow Jones Industrial Average has slipped below 11,000 for the first time in two years due to the bad performance of Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM), John McCain says the companies are worth saving.
McCain was on the campaign trail today in Michigan when he commented on the troubles at Fannie and Freddie.
"Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail," McCain said to supporters in Livonia. "They are vital to Americans' ability to own their own homes. And we will do what's necessary to make sure that they continue that function."
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John McCain wants to save Fannie and Freddie
On a day where the Dow Jones Industrial Average has slipped below 11,000 for the first time in two years due to the bad performance of Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM), John McCain says the companies are worth saving.
McCain was on the campaign trail today in Michigan when he commented on the troubles at Fannie and Freddie.
"Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail," McCain said to supporters in Livonia. "They are vital to Americans' ability to own their own homes. And we will do what's necessary to make sure that they continue that function."
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