I can't for the life of me figure this one out. Fannie and Freddie are out of control, they cooked the books, they're dens of corruption, former management will be going to jail, and eventually their failures may very well bankrupt the US or significantly weaken our currency when we print money to bail them out.
Remember the Neil Bush S&L scandal? Child's play versus what these two companies will cause.
Yet nobody seems to care. Not our (bought and paid for) leaders, not their shareholders, not the media. Nobody.
I just don't get it. Someone help me understand.
Fannie Mae, Freddie Mac still have huge financial problems, regulator says
Fannie Mae and Freddie Mac have made progress toward correcting financial weaknesses, but tight government supervision is needed as the mortgage giants emerge from accounting scandals, a federal regulator said Thursday.
James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, also disclosed that Fannie Mae, which just last month announced a restatement of $6.3 billion in profit for 2001 through mid-2004, had a loss in the third quarter of 2006. He did not specify the amount of the loss.
“They unfortunately have very, very large problems,” Lockhart said in a meeting with reporters, referring to the government-sponsored companies that are the two biggest financiers in the $8 trillion home-mortgage market in the United States. “They have a long way to go; there are still significant worries.”
The problems “are massive and they're ongoing,” he said.
January 20, 2007
Federal regulator calls problems at Fannie and Freddie "massive and ongoing"
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People are too busy working multiple jobs to pay there mortgage. They don't have time to even think about the corruption that is going on behind the scenes. FNMA and GNMA are supposed to be the watch dogs for the housing industry. LOL. They just package all those fraudulant loans and resell them so hopefully noone will ever be able to trace them back to a borrower. Aren't there any whistleblowers out there? Since they are a government beaucracy they will be given a slap on the wrist. Someone should hang!!!
You ain't kidding.. William Poole Fed governer spoke about these Govt. Supported Enterprises ( GSEs) two days ago. Here is the speech from the St. Louis fed site:
http://tinyurl.com/367wxw
I agree with his main suggestion - "fully privatize them". He also tries to jawbone the markets away from their belief that the govt. Fed, someone guarantees the assets of the GSEs.. He says:
"The view seems to be that someone, somehow, would do what is necessary in a crisis. Good risk management requires that the “someone” be identified and the “somehow” be specified. I have emphasized before that if you are thinking about the Federal Reserve as the “someone,” you should understand that the Fed can provide liquidity support but not capital.(7) As for the “somehow,” I urge you to be sure you understand the extent of the president’s powers to provide emergency aid, the likely speed of congressional action and the possibility that political disputes would slow resolution of the situation."
But what are markets suppose to believe - his speech or "dem lying eyes" - I've been following this since 2003 when the accounting scandal was revealed. At first the whole thing was positioned as an UNDERSTATEMENT of earnings - for smoothing / as a pot to dip into in future to ensure future bonuses..
3.5 years later - that's right 3.5 YEARS it turns out that it was an overstatement after all, to the tune of $6 billion.
Fannie Mae didn't report for almost 4 years - yet they weren't delisted from the NYSE. All my theories of what's wrong stem from that fact. Freddie STILL hasn't reported since 2003. What other companieswould be allowed to operate, to have its stock traded with the SEC's blessing without reporting..
Once I take that on board then I realise that this is a TOTAL scam - they are ALL in it together - the regulators, the exchanges, the merchant banks the federal reserve, the MSM - NOBODY makes a fuss about them being allowed to trade on the NYSE. Its ought to be downright illegal - yet the carry on with nary a peep from ANYBODY. And they STILL haven't caught up fully on the reporting. For all I know they are actually BANKRUPT ! That could be real truth at the bottom of this.
On the political front, its an unholy alliance of both political wings - Sadly, FNM and FRE, FHB are regarded as having a social function of ensuring a broadened base of home ownership - nothing wrong with that but in that case it should be a goverment supported program, budgeted accordingly and kept well out of the financial markets -
We have these masks on the whole sordid enterprise - behind the mask stands one of the greediest, crony capitalism, corrupt enterprises that spans the entire set of institutions of this country.
My hope is that a process of privatization starts. Then we can sit back and watch as hurdles - entirely spurious are put up - one after the other - to hide that essential truth - that they are BANKRUPT. As we watch the obstacles to privatization being raised, we'll see who the "Barzinis" are in this sordid mess. Then we can set Mikey onto them.
-K
He did not specify the amount of the loss.
That's good. Just tease us.
Fannie Mae and Freddie Mac were created by Congress to pump money into the mortgage market by buying home loans from banks and other lenders, in order to keep interest rates low and make home ownership affordable for low- and moderate-income people. They bundle the mortgages into securities for sale on Wall Street.
Does this release the burden of failure to pay back the loans from the banks to Freddie/Fannie (ie the tax payers)?
what is going on there. There was an investigation on F/F a year or so back. I thought the Feds backed off! They opened the box and wished they didn't....
It is all lunatic closet cases with delusions of grandeur. Of course they want to privatise, they want to privatise SS & Medicare too. Can't you tell that the PTB are trying to destroy the American middle class? Sheesh. Of course our gubberment is totally demented, what did you expect?
"My hope is that a process of privatization starts."
well, you saw what happened with privatizing health care.... more and more Americans just don't have access any more and those who do pay through the nose.
I hardly think the problem is public versus private. instead, it has to do with the reality that we don't hold management responsible for their plundering...
on ocassion, the US has been tough. a few guys from Enron are supposedly doing time. but, in general, the justice system seems to pursue mostly helpless drug addicts.
IMO, there will always be public/private plundering (called the revolving door) and "privatization" doesn't even come close to dealing with the associated problems of intentional governmental blindness.
as far as I can tell, "privatization" was invented because people were fighting over governmental jobs (funded by taxes), not to enhance the quality of work or improve ethics-- at least, that's the way I read history.
as an example, many people think medicare is far superior to the private insurance system and, perhaps, that's why industry lobbists want to see it fall apart-- so they can set the bar lower for private industry.
if housing becomes as expensive as health care, housing the homeless, if you care about them, will become an impossible thing to do, etc... and
"private industry's ransom demand," to build homes, won't be small.
All charges against individuals in the case were dropped last year despite a $10 billion accounting scandal. Nobody has been charged and nobody will ever be charged. Fannie Mae and Freddie Mac are like the Mafia in the 1950's. Nobody could touch them
Dudes, Zip Realty added a bunch of metros. I looked around places I'd been in the US over the years.
LET ME TELL YOU.... every place was 2 or 3 times more than it was in just 1999-2001.
This market has got to melt down. WTF...does every one really believe their house is 1million???
WTF is going on. How can any one afford anything. IT is all out of cuntrol.
Some shatbox tract home on 1/3acre should be 230k. not 895k. Are we now in the TWILIGHT ZONE???
Look they were only a few Billion off, why worry about such a small amount, no problems here move along now...
In 2004, Congress placed both Freddie and Fannie under direct supervision by the Federal Reserve. Both are in receivership but the powers that be will never publicly admit that.
For any of you out there who do not belive in the "Plunge Protection Team" take a look at FRE and FNM. The stocks refuse to tank. If this were a private company with two years of failed accounting and rumors of insolvency the stock would be at $0.0030.
Try and short 1000 shares and see if the PPT doesn't slap you for it. I think they have been spanking the shorters to the point that not many have the balls to short them anymore.
Lots of disinformation here.
The charges were not dropped against the Fannie guys. You guys think that just because they didn't rip these guys out of their homes and throw them into jail, that somehow they are not going to do something about it.
WRONG.
The guys who ran Fannie are in big trouble, but probably will not be tried and convicted until sometime in 2008. I have worked with a few people who now work over at Fannie. They literally have an army of people from the Big 4 consulting firms working over there to fix the mess. Literally over 1,000 people are working over at Fannie specifically to fix the accounting problems.
The reason they don't know the amount of the losses and restatements is because the investigation is still ongoing. Once the investigation is finished, then they can focus their attention on pursuing a criminal indictment against the former Fannie executives. Hell, it took 4 years for Skilling and Lay to see their day in court after Enron collapsed. Why would you guys think this would be any different?
Keith, the reason why it took so long for this scandal to be uncovered at Fannie and Freddie is that those agencies were in just about every politican's back pocket. The lobbyists for Fannie and Freddie were as powerful as the tobacco lobbyists in the 1980's. They were, indeed, The Untouchables, and OFHEO's status as a regulator was thwarted at every turn. Now the tables have been turned, and Lockhart is keeping the heat on, to make sure that nobody forgets how bad this really is.
However, I don't have a doom-and-gloom scenario about this. Fannie and Freddie are deep under the microscope now, and the problems eventually will be fixed. I think if they had not caught this scandal until right now, Fannie and Freddie could have been doomed...but instead I think they caught the problems in time.
Take the wage cap off of social security and it will pretty much fix the funding problem,then the company crooks will have to pay the 9% tax on all their ill gotten gains as will their companies.This should also put some downwards pressure on obscene pay and bonus packages,and maybe then we will see some dividends again.
as an example, many people think medicare is far superior to the private insurance system and, perhaps
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ROFLMAO you lying piece of trash. Nobody thinks Medicare is better than private insurance. The only advantage is the amount of money paid. The service and wait times are far far worse.
I will take medicare
Fannie furlowed all non essential contract employees over the holidays and are now in a hiring freeze until further notice. Freddie Mac employees have heard rumblings of the same thing in their camp. The bad Sh%t might be coming sooner than we think.
Take the wage cap off of social security and it will pretty much fix the funding problem,then the company crooks will have to pay the 9% tax on all their ill gotten gains as will their companies.This should also put some downwards pressure on obscene pay and bonus packages,and maybe then we will see some dividends again.
++++++++
GREAT idea. Since I, as a middle class person, am getting "double-taxed," I want the rich to feel--and share--my pain....
Fannie furlowed all non essential contract employees over the holidays and are now in a hiring freeze until further notice. Freddie Mac employees have heard rumblings of the same thing in their camp. The bad Sh%t might be coming sooner than we think.
+++++++++
Oh, dear. Time to find my raincoat, boots and umbrella. The brown stuff appears to be getting near the rotating machine....
"ROFLMAO you lying piece of trash. Nobody thinks Medicare is better than private insurance. The only advantage is the amount of money paid. The service and wait times are far far worse."
Bullshit.
Tell anybody on Medicare:
"We're gonna take you out of Medicare and put you on private."
Will they be happy or will they scream and bitch?
100 times out of 100: they'll scream and bitch.
The reality is that socialized medicine, with all its problems, is better than USA-style pseudo quasi """private""" insurance-scam-run medicine.
Medicare has much lower administrative costs.
We already have socialized medicine:
it's for the elderly who vote frequently.
All is well here. There's nothing to see. Move along now.
"You mean: let the taxpayer pay for it (once again) is fixing the problem?
"
Who gives a shit, as long as the "insiders" make a killing, who gives a fuck what the sheep (oops, taxpayers) think. Remember, the sheep are too busy figuring out how to pay that house payment.
Hold still little fish, while we gut you.
har har har.
Taxpayers cannot help with this problem. They are all up to their ears in debt themselves.
Mortgage debt, cc debt.
Like they say, you can't get blood from a stone.
Great economic plan that was to run a country on debt.
http://wikileaks.org/
This might be a good start to uncover the fraud ourselves.
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