U.S. government expected to seize Fannie Mae, Freddie Mac

[Clarence]

Government may soon back troubled mortgage giants - Yahoo! News

WASHINGTON - The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies... The news, first reported on The Wall Street Journal's Web site, came after stock markets closed. In after-hours trading Fannie Mae's shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac's shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government's actions... This summer, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the two companies if needed. Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses. Supporters, however, argue the Bush administration had little choice but to support Fannie and Freddie, which together hold or guarantee $5 trillion in mortgages — almost half the nation's total.

Thing's like this are why I rely on Volconvo for perspective. What are the implications?

[Thanatos]

That this would be a really, really bad time to have a mortgage or really any sort of debt.

[Deadeye]

Quote by: Thanatos That this would be a really, really bad time to have a mortgage or really any sort of debt.

This is also a really, really bad time for those who took a risk to speculate in investment property.

Fact is speculation is never a sure thing. Speculation is always risky. The banking industry bet on the endless increase in homevalues. Well, they were amiss. The housing market collapsed...or at least faultered.

This speculators who took the rish should pay. Those of us who did not shouldn't. Therefore I hate to see the government take over Fannie Mae and Freddy Mac. The institutions should go broke and liquidate their assets just like any other lending entity.

[barts]

Quote by: Clarence Government may soon back troubled mortgage giants - Yahoo! News Thing's like this are why I rely on Volconvo for perspective. What are the implications?

Implications? Evidence that unfettered capitalism devolves to crime, and that reasonable legal constraints on capitalism are necessary. The mortgage industry in the United States has just been nationalized. Socialism has, once again, rescued the capitalists.

[Nono]

I was going to make this very point. The much-ballyhooed Free Market doesn't work to general benefit unless it's regulated by government.

But you'll notice how, in these "Washington consensus" days, only the disasters get nationalized. The money-makers get privatized.

What this means is that the taxpayers end up paying for the losses incurred by our capitalist friends, but don't get to benefit from profitable state enterprises.

I believe Mrs Thatcher led the way in this respect.

[Deadeye]

News a few minutes ago (Sunday; opening day of NFL football)

The govenment has taken over the operation of Fannie Mae and Freddy Mac. These two giants hold half of the mortgages in the USA.

So it's another government bailout using taxpayer money to back up those who made poor business decisions.

[Nono]

Quote by: Deadeye Another government bailout using taxpayer money to back up those who made poor business decisions.

Those who made poor business decisions being huge financial institutions acting on the basis of the Triple A Rating assigned by the Trusted Private Agencies.

This is what happens when government abdicates its responsibility to regulate properly -- the Hallowed Market goes hogwild.

The same thing happened under Saint Ronald Reagan with the savings and loan debacle.

But people will never learn. They'll keep nodding eagerly when some numbskull like Reagan chants that Government is the Problem, Not the Solution.

[Zeebadee]

Just a few "minor housing problems" according to Xyzer. Nothing to worry about.

[Shade]

Wow. Some of you guys just cannot grasp what the concept of "free market" means, huh?

Fannie and Freddie were both created by government. They were both given implicit guarantees by government, which is why they had access to cheaper capital than any of their competitors. Government controlled how much they could lend. When the numbskulls who ran those two organizations could not figure out what their numbers were, government gave them special exemptions so they did not have to report any quarterly or annual reports to the SEC for two years.

That might be mercantilism. It might be a form of fascism. It might even be a form of "state capitalism."

But it ain't no free market. No way. No how.

[Nono]

It's pampering of the private sector.

The free market is an unattainable ideal, like self-governing anarchistic collective or whatever -- pure utopionism.

The market has to be corralled by a democratically appointed body, i.e. regulated. Otherwise it's The Jungle.

And that ain't pretty.

[grandpa]

Quote by: Nono It's pampering of the private sector. The free market is an unattainable ideal, like self-governing anarchistic collective or whatever -- pure utopionism.

Well, it's different when everyone's in the same boat. Collectivism is the best, most logical way to address issues that a
substantial portion of the consuming public defines as "important." It's hardly "pure utopianism."

Grandpa h.

[Shade]

Quote by: Nono The market has to be corralled by a democratically appointed body, i.e. regulated. Otherwise it's The Jungle.

That's what you have now.

Corporate welfare and bailouts happen because some legislators somewhere pass laws that take money from you and give to the corporations to bail them out.

Democratically appointed bodies certainly don't prevent such things. They actually promote them (as we are seeing now and have seen for generations).

[Thanatos]

Quote by: Shade That's what you have now. Corporate welfare and bailouts happen because some legislators somewhere pass laws that take money from you and give to the corporations to bail them out. Democratically appointed bodies certainly don't prevent such things. They actually promote them (as we are seeing now and have seen for generations).

This is a takeover, not a bailout. Either way the idea is that these companies have grown so huge that allowing them to die of natural causes would crash the economy. This case makes sense. In practice bailouts have been abused in the past, but if you want a much more regular crime you should be looking at oil and corn subsidies.

So in pure capitalism your tax dollars would never go to Halliburton or ConAgra because there would be no one to corrupt but the market would (and has when regulation was lax) go through periodic massive recessions. It is a smaller wish to expect and vote for less corruption than it is to wish for a change in the laws of economics so my position has not changed.

[minorwork]

Quote by: grandpa Well, it's different when everyone's in the same boat. Collectivism is the best, most logical way to address issues that a substantial portion of the consuming public defines as "important." It's hardly "pure utopianism."

I knew it. Collectivism, eh? Isn't that known by a few other names? What particular view of humanity's nature does the collectivist governments claim?
Blank slate, noble savage, ghost in the shell? Slave? Shall we call each other, comrade? I know it's too late. Sour grapes I guess. I hope I can still afford Vaseline.

What other industries are too big to let fail? GM, Chrysler, Ford? How 'bout them airlines? Hey, how 'bout me? Doggone that Federal Reserve that's gonna inflate the piss out of the currency. What's it come to when the pre-1982 penny is the most intrinsically valuable piece of money in my pocket.

July 23, 2008 IMF article IV consultation with the United States
Public Information Notice: IMF Executive Board Concludes 2008 Article IV Consultation with the United States

These articles discuss the purported International Monetary Fund audit of the United States banking system. Hoo Boy. Wait'll 2010. I wouldn't want to be President when the riots start. But that great collectivist United Nations will offer to help I'm sure. Anyway, here be the articles.
RedStateEclectic : IMF to Audit Federal Reserve

West Wing: The Shrinking Influence of the US Federal Reserve - International - SPIEGEL ONLINE - News

[grandpa]

Quote by: minorwork I knew it. Collectivism, eh?

It's a simple idea; the survival of the whole should take precedence over individual greed. And, in order to assure that society survives, individual needs and self-determination should be respected and protected. It's a pretty simple and general principle -- hardly "utopian."

And the United Nations is not collectivist, at least not as I understand the term.

Grandpa h.

[GHook93]

Quote by: Clarence Government may soon back troubled mortgage giants - Yahoo! News Thing's like this are why I rely on Volconvo for perspective. What are the implications?

I talked to one of my clients on this, who is the CEO of a mid-sized student lender. His prospective is: that first America just double its already inflated national debt. Something that America really couldn't afford to do. With this the value of our dollar will shrink even more. Something we couldn't afford either. With both of those things happening the Fed will have no choice but to raise interest rates, meaning less lending, more floreclosures, less refinancing and a bigger hit to the already shot housing, auto financing and credit industry. That said he mentioned it would be 10 fold more chaotrosophic it we let Fannie Mae and Freddie Mac fold!

This decision was like picking between getting a steel boot kick in the balls (the takeover) or a blindsided aluminum bat to the head (letting FM and FM fold).

[GHook93]

Quote by: Thanatos That this would be a really, really bad time to have a mortgage or really any sort of debt.

Wrong your current mortgage won't be effected. Its the person who is trying to refinance or who had the bridge loan should be scared.

[GHook93]

Quote by: barts The mortgage industry in the United States has just been nationalized. Socialism has, once again, rescued the capitalists.

Wise man once said: Don't count your chickens before they hatch! Rescue could be a relative term of damage mitigated!

[GHook93]

Quote by: Deadeye News a few minutes ago (Sunday; opening day of NFL football) The govenment has taken over the operation of Fannie Mae and Freddy Mac. These two giants hold half of the mortgages in the USA. So it's another government bailout using taxpayer money to back up those who made poor business decisions.

What did you want to happen! I consider myself a fiscal conservative in the mold of a libertarian, but do you really think that letting FM and FM go under would be a wise thing? It might be a blow in which America couldn't stand up from!

[minorwork]

Quote by: grandpa It's a simple idea; the survival of the whole should take precedence over individual greed. And, in order to assure that society survives, individual needs and self-determination should be respected and protected. It's a pretty simple and general principle -- hardly "utopian."

Comrade. Surprisingly I find myself agreeing with "the survival of the whole should take precedence over individual greed." Though you have made no allowances for corporate, bureaucratic, and political greed. You have eschewed profit as desirable and I think you equate profit with greed. How should I distinguish the difference?

Profit yields wealth for personal stability and security. Greed uses wealth as an enabling power to rule over others. The power to tell people how to run their lives. The power to forcefully take the fruits of other's labors and to solidify the ruler's power until the populace is no better than slaves. The big bankers are the major players in this concept of greed. The politicians, all too willing accomplices whose pre-election rhetoric embraces change for the good of the nation only to dissolve post-election to the using of the nations resources for the good of their political party. The media moguls, the brokers of the scheme, shape, filter, and disseminate censored information to the populace.

Consensual collectivism? Yes. Force it, however, and we're going in the dirt. But you probably know that and realize that slow is the way to go. By working within, controlling communications, subtly playing on human emotions and fears, exaggerating small differences between people to significant threats, pushing those fears to hysteria so as to create divisions in the nation, and so separate the populace that teetering at the abyss of chaos, the call will come from the people themselves for the stable secure life style of the slave. Those insidious techniques eventually result in the demand of the blinded populace to be led into the hands of the planner masters. They are blinded by the quiet elimination of constitutional principals that would protect us from the evils that are inherent in government. Case in point, the elimination of real money with intrinsic value for the paper of today whose only worth is as an acceptable form of tax payments.

The United Way is an acceptable example of consensual collectivism in action. But, comrade, I may be abusing the term "collectivism." Do you have references to collectivism that embrace your use of the term? What sacrifices does collectivism demand of the individual? Of the State?

Quote by: grandpa And the United Nations is not collectivist, at least not as I understand the term.

Dong chi. Are there any nations that embrace your collectivist ideology politically? Vietnam? Cuba? Venezuela? China?