Freddie and Fannie seized (finally). Now what?

[DJofSD]

And who exactly is the FHFA any ways?

[kenwoodallpromos]

"Both companies were placed into a government conservatorship that will be run by the Federal Housing Finance Agency, the new agency created by Congress this summer to regulate Fannie and Freddie."
My question is, did F + F get so intwined with the private housing industry that it helped compromise them?

[chickenhead]

Bank of America basically scripted this entire thing going back for some time....just in case anyone still thinks there wasn't a quid pro quo involved with the CFC purchase....

BofA writes congressional housing bailout bill.. (http://corner.nationalreview.com/post/?q=ODJkN2Q3NTY0MjAwYjJlNTY0NTJmMWEzZTI1OGZjZTg=)

Yesterday, Tim Carney reported that the prevailing sentiment on Capitol Hill is that the Dodd-Shelby bill "is exactly what Bank of America and Countrywide wanted." BofA is in the process of acquiring Countrywide. Countrywide is currently embroiled in a scandal over its V.I.P. program, under which several powerful politicians, including Sen. Chris Dodd, got preferential loan rates.

This discussion document (dated March 11, 2008) would appear to support the contention that BofA essentially wrote the bailout section of the bill. Almost all of BofA's preferences are mirrored in the Dodd-Shelby legislation. The BofA document even offers PR tips, such as "We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bail-out of the bond market."

and now,

http://www.bloomberg.com/apps/news?pid=20601087&sid=aehgn34fooGc&refer=home

Paulson met with Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron yesterday to tell them of the decision to put the companies into conservatorship, and remove the executives from their jobs, according to two people briefed on the plan.

Paulson consulted with Bank of America Chief Executive Officer Kenneth Lewis, according to people with knowledge of the talks. A public announcement is expected this weekend, one person said. Frank said he plans to hold a hearing next week.

it's good to be king.

[prospector]

it seems to be more of the same to me..
congress creates the rules that create these messes
taxpayers get to pay the bill..

[DJofSD]

it seems to be more of the same to me..
congress creates the rules that create these messes
taxpayers get to pay the bill..Damn straight.

[sammy the sage]

Insiduous, if you ask me...

just another form of BIG BROTHER getting stronger :mad:

[Tom]

Whose fannie was seized?

[skate]

It's those lessons you got while in school about Preferred stock vs Capital stock.


Prefd shareholders get Zippo, that's game.

Banks wont get hurt since they didnt buy into the prefd stocks. So, no banks going down.
Treasury is doing the Bailout, not the Fed. Treasury will buy F and F mbs bonds to drive interest, on mortgage rates, down..

Astonishing move will benifit those who managed prudently. they will now be able tp refi at lower rates giving boost to the economy.


Say, thank you UncleGeorge/BigDickChaney.;)

[skate]

Oh, it's a new Fanny and Freddie, again. Has nothing to do with the one started in 1496.

And thank you FDR.

:cool:

[Pace Cap'n]

Whose fannie was seized?

Yours, mine, skate's and everone else's.

[Secretariat]

Well so much for free markets.

The government has essentially nationalized Fannie Mae and Freddy Mac. Repubs cry the government should butt out and just let business alone (unless businesses go broke and need bailed out by taxpayers.). Get ready for the auto companies to ask for loans next.

"What a country."
- Yakov Smirnoff

[lamboguy]

george bush senior wipes out the commies, junior brings them back!


he fooled all you guys that thought you have a rightie. he is as leftie as it gets. he is one heck of a leftwinger, he gives to the corporation and don't stop giving.

[Show Me the Wire]

Fannie Mae was originally federal owned and operated. Now it is returning to its roots, where it belongs.

[Secretariat]

Fannie Mae was originally federal owned and operated. Now it is returning to its roots, where it belongs.

Apparently, Palin never got that message that it was NOT federally owned previously. Whew...

http://www.mcclatchydc.com/227/story/51940.html

Treasury Secretary Henry Paulson briefed Obama late Friday on plans to seize, perhaps as early as this weekend, Fannie Mae and Freddie Mac in an effort to bolster the pair and calm jittery global financial markets.

Paulson told Republican John McCain that Fannie and Freddie — which purchase mortgages from banks and package them into popular bonds sold to investors — would be seized and placed under temporary control in one of the largest government bailouts ever. The move is expected before Asian markets open Monday, which is Sunday night on the U.S. East Coast.

McCain's campaign on Saturday called for the eventual elimination of Fannie and Freddie, complaining they have become so large and poorly managed that they pose a risk to the broader financial markets.

Senator McCain will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government," said Doug Holtz-Eakin, a senior McCain policy adviser.

Obama, too, has been critical, complaining that Fannie and Freddie should either operate as public entities without profit, or as private companies that won't be rescued if they fall into trouble.

McCain's running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had "gotten too big and too expensive to the taxpayers." The companies, however, aren't taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.

[Tom]

Well then, she was correct.

[DJofSD]

OK. Now, the rest of the story. The gobment is running these failed institutions as a conservatorship and not a receivorship. They're going to try to make them work. More money down the rathole, boys. Time to buy the SKF.

[Tom]

Yeah, like they did with Amtrak.

[chickenhead]

They're going to try to make them work. More money down the rathole, boys. Time to buy the SKF.

The big banks have long wanted F + F to go away so they could get more of that business, now they're gonna get their wish as F+F reduce their holdings each year (after briefly expanding to hoover up some more of the bad stuff right now). Go double short the taxpayers, not the banks. It's very very good for the banks.

[Tom]

And gets screwed here?
Three guesses.

Shenanigans in the F+F have been typical dem ploys for over a decade - Dodd, Schummer, Frank.....we get a nice sneak peak at what to expect economy-wise if we vote the crooks back into office.

[bigmack]

The CEO's of Fannie & Freddie stand to reap 9 & 14 million respectively in severance pay. The 14 includes 9 mil that he insisted be slid into his contract last November when Freddie's troubles were already under scrutiny.

I should be so lucky to write such a contract for myself. If you hire anyone else for this mess of a company I get $9mil

[DJofSD]

And gets screwed here?
Three guesses.

Shenanigans in the F+F have been typical dem ploys for over a decade - Dodd, Schummer, Frank.....we get a nice sneak peak at what to expect economy-wise if we vote the crooks back into office.The next move in this game will be the Congress' but not until the new Congress is seated.

[DJofSD]

The CEO's of Fannie & Freddie stand to reap 9 & 14 million respectively in severance pay. The 14 includes 9 mil that he insisted be slid into his contract last November when Freddie's troubles were already under scrutiny.

I should be so lucky to write such a contract for myself.In any other situation the self grandizement would land you in jail.

I have to agree with some of the comments I heard on CNBC today: we're more communist than China.

[Tom]

Congress needs to take ALL pay from theses yoyos.
They deserve not one penny.

[riskman]

It is amazing how free market capitalism is the mantra when prices are going up, but big government socialism is the answer when our multi-million dollar corporations make drastic risk management mistakes in search of obscene profits. We are now on the hook for all the past and future bad decisions of Fannie Mae and Freddie Mac. The Congressional Budget Office estimates that backing these two awful institutions will cost taxpayers $25 billion. Remember the government estimate for the Iraq War of $50 billion. We are at $700 billion and counting. Our political leaders continue to spend our money with absolutely no plan to pay for these initiatives. At the end of the day, two companies that have lost a combined $13 billion in the last 9 months can now lose billions more without a worry. It is good to see that their CEOs really believe in pay for performance.

The National Debt amount is $9.6 trillion. It was approximately $5.8 trillion when George Bush took office. These figures do not include the unfunded liabilities exceeding $50 trillion for Social Security and Medicare liabilities. It appears that 90% of the national debt has been generated since 1980. Republican Presidents have been in charge for 20 of those 28 years. Of course, Democrats have been in control of Congress for most of this time period. This proves that when Presidents and Congress put their heads together they can achieve big things – pushing our great country to the brink of economic disaster.

[DJofSD]

We are now on the hook for all the past and future bad decisions of Fannie Mae and Freddie Mac.

Not necessarily. As I understand it, the agreement that is in place by the government falls just short of "backing in credit and full faith of the U. S. Federal governemnt."

[Valuist]

I wonder what is going to happen with Lehman Brothers. Apparently they are selling a portion of the company......the rumors about them came out about the same time as the Bear Stearns rumors...and they were every bit as negative. Wouldn't be surprised to see them go the same way.

[DJofSD]

Some talking heads yesterday were opening speculating why GS had not just bought them outright.

[skate]

Well so much for free markets.

The government has essentially nationalized Fannie Mae and Freddy Mac. Repubs cry the government should butt out and just let business alone (unless businesses go broke and need bailed out by taxpayers.). Get ready for the auto companies to ask for loans next.

"What a country."
- Yakov Smirnoff

You gotta go to the root babe. or maybe not?

But, a, FDR started the Fanny , Fred deal and LBJ was the 'ONE' to start the treasury picking up home mortgages.

So now the poop hits the fan and (finnally) and uncleGeorge Cleans house, just like he's done (still doing) with all those, Big Business, false-Accounting- record-keeping-people from the 90s.
He's got them heading to the hu scouts, cleaning up the hubbub.

Yeppers, the gov has been involved, now it is just a matter of 'mow down'. one by one, like making mulligan stew, nobody can figure this out, cept uncleGeorge and BigDickCheney.

Say "thank you UncleGeorge":kiss:

[chickenhead]

If these BofA rumors are more than rumors, they better be bending Bernanke and Paulson over to the extreme.

[DJofSD]

With the continuing crisis on Wall Street over this last weekend, SKF gapped up huge on the opening.