November 23, 2007

Chew on this: "Fannie and Freddie pullback would devastate economy"


Too big to fail?

Not when you see the stench being hidden in the books of these out-of-control disasters-in-the-making.

And think it's bad now? Just wait until conforming start melting down. It's not just subprime. It's not just Alt-A. It's everything. And Fannie and Freddie are holding the stinking bag.

Now watch your clueless and corrupted Congress try to prop up these disasters. And watch Ben Bernanke freak out, slash rates and absolutely destroy the US dollar - anything to prevent Fannie and Freddie from imploding.

WASHINGTON (Reuters) - If anyone thinks the current U.S. housing downturn is bad now, things would get far worse if Fannie Mae or Freddie Mac were to suddenly stop buying mortgages, a move that would drive up the costs of home loans and devastate the economy.

Fannie Mae and Freddie Mac, the nation's two largest sources of mortgage finance respectively, recently reported combined losses of $3.5 billion. Borrowing costs have skyrocketed and investors have erased billions of dollars in each company's equity market capitalizations.

Few think the two companies are likely to pull out of the housing market, even temporarily. However, if the stream of home loan failures were to force the companies to suspend new mortgage investments, the market for mortgage bonds would "freeze up," said Tom Sowanick, chief investment officer of Clearbrook Financial LLC

Fannie Mae and Freddie Mac own or guarantee a combined $4.8 trillion of U.S. home mortgage loans of more than 40 percent of the total outstanding

57 comments:

Anonymous said...

i always thought fannie and freddie had strict guidelines for borrowing. how did they ever get mixed up in this sub prime mess?

keith said...

Easy

Home price cratered

Anonymous said...

.



A S**T sandwich is humbling every now and then!

Better on rye!


.

Anonymous said...

"Now watch your clueless and corrupted Congress try to prop up these disasters. And watch Ben Bernanke freak out, slash rates and absolutely destroy the US dollar - anything to prevent Fannie and Freddie from imploding."

The next step will be to increase the amount on jumbo loans to a million(as suggested by Bernanke).
Then its full speed on the printing presses. $150 oil and 1000 dollar gold by 4Q 2008. Bernanke will not freak out to do this, it is just the next step of the grand plan for global central bank rule.

Anonymous said...

Thank you FDR and DemoRats for creating these two monstrosities that put all of the risks in the taxpayers while giving all of the benefits to bankers. Add it to the Social inSecurity ponzi schemes and you have an economic meltdown.

Shakster said...

HEY ,This cat has adopted me ,and my house ,and I need a name for him/Her.
I was thinking of some when I discovered that the thing did a #2 in the house,now I have to reconsider.
Maybe Sh!tbox
Maybe AssHat
or in honor of the "Kings of Crap" I could name him Freddy.......
or I could just name him Jeff.
I am not really a cat person,and hate catsh!t,but even so,I still wouldn't name him GW,Bill,Hillary,or Rush.

Anonymous said...

i always thought fannie and freddie had strict guidelines for borrowing. how did they ever get mixed up in this sub prime mess?

It's not just sub-prime. It's called borrowing/lending more money than you can afford to pay back/lose.

Fannie and Freddie are up to their elbows in option ARMS (ticking time bombs). They even do 40-year mortgages. If you think Fannie/Freddie were immune to the greed of the last few years, you are sadly mistaken.

Charles said...

Anon Thank you FDR and DemoRats for creating these two monstrosities that put all of the risks in the taxpayers while giving all of the benefits to bankers. Add it to the Social inSecurity ponzi schemes and you have an economic meltdown.

Yeah those Republicans Nixon (Pullued us of the Gold Standard) and Greenspan (Do I even need to say anything???) sure helped forestall our economic problems.

Edgar said...

...the market for mortgage bonds would "freeze up," said Tom Sowanick, chief investment officer of Clearbrook Financial LLC

The answer? Bomb Iran, right keefer?

keith said...

Gotta love the Democrat/Republican thing breaking out on the Fannie/Freddie thread

They're the problem folks. Drop the party affiliation. The revolution starts now.

Anonymous said...

FDR ran the country from 1933 to 1945. During this time he turned the USA into a socialist cesspool with Social Security, Fannie, Freddie and welfare. LBJ another Democrat created the monster we call Medicaid. Democrats ran congress from 1933 to 1995 with only 4 years in between of Republican rule in between.

And yet you morons blame Republicans for the mess we're in? Unreal.

Anonymous said...

Your blog has become a circus of angry and bitter leftwing trolls. It's nothing but a big, stupid joke now, just like socialism

Anonymous said...

Democrats were/are not the issue, FDR was however. FDR was not on any political side, he was on the international bankers side, he was only a democrat because that was the type of politician the ignorant Americans would fall for at the time. It has always been the goal of elite to recreate the feudal system of old europe. These waves of financial devastation (bubbles) is the current method in achieving this end. We have a few more waves left to go, then WW3 and we all will be serfs. Why this can happen is a reflection of the stupidity, greed, and laziness of the common person.

Anonymous said...

The one trait that I dislike the most about the Democrats is that they all seem to speak to adults like children. They come off like "I know whats best for you little child". "I will dream up all of this government sponsored nonsense in the name of keeping you safe from yourself." If we had less intervention from government, we would be so much better off. If someone's ass was on the line for these crazy loans other than the government, this would never have happened. Don't get me wrong, Republicans suck too right now. I just can't believe that there is only one Ron Paul. Nothing is going to change in this country until the majority of Congress actually starts to represent the people and genuine free markets(god forbid) instead of their own special interests. (big business and lobbyists)

too high to die said...

OK, so borrowing gets more expensive -- how does that equal a bigger problem than the US is facing now?

Back to basics... why should people who can't afford it be allowed to "buy" a house?

AmazingRuss said...

You can't be a good sheep without party affiliation....how would you know what to think?

Roccman said...

"Then its full speed on the printing presses. $150 oil and 1000 dollar gold by 4Q 2008. Bernanke will not freak out to do this, it is just the next step of the grand plan for global central bank rule."

Try $700 oil...

Anonymous said...

Gotta love the Democrat/Republican thing breaking out on the Fannie/Freddie thread

They're the problem folks. Drop the party affiliation. The revolution starts now.


Keith,
been waiting for a comment on the bonuses that Wall Street is awarding itself this year. I listened to Peter Schiff's radio show on Wednesday evening. He was dismayed at the gall these bastards are showing by giving themselves record bonuses during a year of record losses. Thoughts???

Agreed on the Repub/Demo thing. They are the enemy.

Bitterrenter said...

If Roosevelt hadn't injected a healthy dose of socialism into this country the rabble would have murdered the wealthy, starting with the republicans and conservatives.

Personally, I would have preferred that. We'd be a whole lot better off now.

I'd love to see the conservatives on this board had we not leveled the playing field in the 1930s through libertalism. Most of them would hardly be sitting in front of a computer (which probably wouldn't even exist). It's doubtful that many would even have indoor plumbing.

Oh and Keith, there is no magical "third way". There are only two ideologies, two ways to run a society. Selfishly and greedily with little thought of your fellow man- the conservative way- or with a sense of community and looking out for the greater good- the liberal way.

bank dick said...

"i always thought fannie and freddie had strict guidelines for borrowing. how did they ever get mixed up in this sub prime mess?"

Bubba Clinton put a corrupt, incompetent crony named Franlin Raines in charge. The books are so screwed up no will ever know how much he and his buddies stole.

Princess Mononoke said...

Anonymous said...
>>Your blog has become a circus of angry and bitter leftwing trolls. It's nothing but a big, stupid joke now, just like socialism
November 24, 2007 12:05 AM

Is that why you have remained ANONYMOUS???

I for one am NOT angry, NOT bitter, NOT leftwing, and most definitely NOT a troll. It sounds like you are describing a reflection of yourself! Feel better now...

Anonymous said...

"How did they ever get messed up in this Sub-prime mess"??!!

This is the POINT that so many DON'T get yet and it's killing me! It's not a sub prime mess people--It's EVERYTHING mortgage related-mess!! The Alt A melt-down is the next shoe dropping, and it is going to make subprime look like a tea party....F&F are so freaking F'd--and guess who will ultimately pay--YOU and I.

PussyGalore said...

SHAKSTER!!

Buy the poor cat a damn litter box will ya?? He will figure it out. And in the meantime you can name him--

"Pee-Pot-Squat-and Leave it".
(My best friend's cat growing up):))

chris g said...

Why in the hell does every damn thread on this board devolve into some lower-class, mudslinging, grammatically challenged political debate? This mess has nothing to do with party lines but you ignorant fools can't seem to grasp it.

It's not a matter of where to start when it comes to naming every corrupt, good-ol-boy, interest-conflicted politician that has helped cause this mess through either action or inaction, but rather, it's a matter of where to end. And it doesn't end at the line between red vs. blue. Those who think otherwise are closed-minded trolls.

Anonymous said...

bitterrenter has shown himself to be one of the most faithful idiot sheeple. he probably worships charles schumer and thinks hitlary is here to help the people

stuckinthecity said...

More scare tactics.

Fred and Fan are not going anywhere. Remember the accounting scandal they had back in ~2004? The G men open that Pandora's Box and shut it right away! What happened? Nothing.

The Fed will dump its rate to 0 before these two implode. Besides things will level out once prices come down enough to line up with rent and income.

What we all learned here is that it was never about the house. It was about the MBS's, the CDO's, the SIV's. Like cigarettes are about nicotine not tobacco, homes were investment vehicles. That caused all the problems. Once they go back to just being a home, everything will be fine.......until next time! hahah

Anonymous said...

What does bitteridiot have to say about this?

CHARLES E. SCHUMER: CAREER PROFILE (SINCE 1989)
Top Contributors
1 Goldman Sachs $458,440
2 Citigroup Inc $399,716
3 JP Morgan Chase & Co $325,200
4 Morgan Stanley $298,946
5 Bear Stearns $230,350
6 Merrill Lynch $226,150
7 UBS Americas $222,000
8 Credit Suisse Group $199,044
9 Lehman Brothers $181,450
10 Time Warner $167,500

Anonymous said...

Mr bitteridiot?

HILLARY CLINTON: CAREER PROFILE (SINCE 1989)
Top Contributors
1 Citigroup Inc $635,110
2 Goldman Sachs $631,790
3 Morgan Stanley $476,510
4 DLA Piper $445,220
5 Time Warner $348,840
6 JP Morgan Chase & Co $347,425
7 Skadden, Arps et al $314,140
8 Kirkland & Ellis $291,850
9 Cablevision Systems $276,763
10 EMILY's List $266,127

Anonymous said...

bittersheeple? no comment?

CHRISTOPHER J. DODD: CAREER PROFILE (SINCE 1989)
Top Contributors
1 Citigroup Inc $415,600
2 United Technologies $386,650
3 Bear Stearns $354,450
4 Sac Capital Advisors $341,600
5 Goldman Sachs $264,916
6 American International Group $258,938
7 Deloitte & Touche $258,670
8 Greenwich Capital Markets $240,500
9 St Paul Travelers Companies $210,900
10 Morgan Stanley $208,425
11 JP Morgan Chase & Co $203,773
12 Credit Suisse Group $196,550
13 Merrill Lynch $192,350
14 Royal Bank of Scotland $184,050
15 PricewaterhouseCoopers $175,650
16 KPMG LLP $159,590
17 Ernst & Young $145,750
18 Lehman Brothers $140,100
19 General Electric $135,530
20 Hartford Financial Services $132,650

stuckinthecity said...

The next step will be to increase the amount on jumbo loans to a million(as suggested by Bernanke).
---

They can make the conforming standard $1,000,000,000,000,000, but it will not change the fact that the average person CAN NO LONGER AFFORD the average house! Wishing that they could will not change anything.

It is not about the loan, it about the value, the bang for the buck.

Anonymous said...

Democrats good, Republicans bad. baaah baaah baaah

BARNEY FRANK: CAREER PROFILE (SINCE 1989)
Top Contributors
1 JP Morgan Chase & Co $68,500
2 American Bankers Assn $65,150
3 National Assn of Realtors $60,042
4 Human Rights Campaign $50,275
5 American Fedn of St/Cnty/Munic Employees $48,000
6 American Assn for Justice $46,500
7 Laborers Union $44,750
8 UBS Americas $43,100
9 Securities Industry & Financial Mkt Assn $40,996
10 American Institute of CPAs $39,859

Anonymous said...

All the bubble areas are full of right-wing nutjobs. You don't see expensive housing in liberal areas because liberals aren't greedy. San Francisco, Manhattan, DC, Boston, LA and Seattle all have very affordable housing.

Anonymous said...

Just so we're fair here Republicans receive more money from Real Estate contributors than Democrats:

REPUBLICAN PARTY
(2006 election cycle)

Real Estate: $17,173,180

DEMOCRATIC PARTY
(2006 election cycle)

Real Estate: $11,805,653

Lets not go Sean Hannity and only present facts from one side. Both are bought but Republicans are just more bought.

Do your own research instead of letting people think for you:

http://www.opensecrets.org/parties/indus.asp?Cmte=DPC&cycle=2006

Princess Mononoke said...

Anonymous said...
>>San Francisco, Manhattan, DC, Boston, LA and Seattle all have very affordable housing.
November 24, 2007 6:26 AM

I'm sorry but are we living in the same dimension / universe???

Bitterrenter said...

Republicans and conservatives provide no easy target for hypocrisy because they have no ethics or decency to violate.

You also don't seem to understand. It's not the PERSON of the political party, it's the IDEOLOGY.

The conservative and thus republican ideology believes in a system where there are no controls on economic activity, thus we have the "shenanigans" of Wall Street, the housing panic, etc. They also DON'T believe in economic justice, equal opportunity and fairness. if you're born into wealth you get to amass even more wealth with all the doors open to you but not the infidels of the lower classes. As the conservatives have increased their influence the level of what constitutes an infidel has crept up. It started with the blue collar people (while the lower level white collar approved) and has moved upwards to all levels of the middle classes. Meanwhile, the top tier has really taken off with their tax rates lowered dramatically, the shortfall contributing even more to the misery of the bottom 90%. Conservatism favors a South American-style culture, almost feudal with little or no redistribution of wealth. The end game being a few controlling ALL the wealth. Already the top 1% controls 21% of the wealth. The same thing happened before the Great Depression which followed 30 YEARS of republican rule and their regressive, conservative economics.

Argue with this all you want but when the democrats, particularly liberal ones, run the country things improve for ALL people, mainly for those in the middle to bottom. The rich still get to be rich but they are FORCED to pony up for the things that level the playing field- infrastructure, education, etc. It may not seem fair but it's howe MOST of you got where you are. No, it wasn't your parents hard work. The effects of the socialistic policies installed after the Depression have benefited you GREATLY. If the middle class was stuck paying for their aged relatives and education by themselves they'd NEVER have risen as they did. We'd be Brazil.

But then the middle class got spoiled and believed the conservative lies that the poor were the problem. They allowed the conservatives to dismantle the system over the last 30 years. And now they find out the middle class was also the target. EVERYTHING is geared towards the top. Housing prices, higher education prices, health care prices- the biggest profits are with supplying the rich with the goodies.

So now we're left with stagnant wages (for the bottom 90%), near-royalty class of wealthy, crumbling infrastructure and DECLINE.

You don't have to believe me. Just read some Paul Krugman, Malcolm Gladwell or even a speech by Warren Buffet.

But you go on believing that the parties are the same. And before you go bristling that this post has nothing to do with the housing crash, read it again. If not for the laizze-faire (spelling?) policies of conservatism, SOMEONE would have been watching the crooks that took us here. But the only thing republicans HATE more than taxes is regulation. See, regulation stops them from f*cking people out of money.

Bitterrenter said...

And as far as I can tell, taking campaign contributions is what you must do to get elected in this cesspool culture. Pointing out that democrats have contributors is no great revelation of hypocisy.

You think they'd even leave the starting gate with zero dollars?

And if money is so dirty, why do you Ron Paul cultists relish your little $4 million day? Why do you look forward to the next one? You think that makes you any different that the Human Rights Campaign or Bear Stearns? Or MoveOn.org?

Princess Mononoke said...

Ahhhh Geeez! These trolls are like crank callers...

Can you please drop off the face of this Earth? Humanity will NOT miss you one iota! Oh wait, I'm sure the Universe would just spit you back for lack of taste!

Andrew Hac said...

Senior BorkAFatty and Senorita Mononoke are busted like a freaking blow-fish now...

Go Wonton !!!

Princess Mononoke said...

Hey Andrew Hac,
I was wondering when you were going to chime in...?

Satan told us that you missed your last meeting with him. Naughty boy. He said that you are now required to have a double session with him this weekend. Bon voyage!

Anonymous said...


Anonymous said...
>>San Francisco, Manhattan, DC, Boston, LA and Seattle all have very affordable housing.
November 24, 2007 6:26 AM

I'm sorry but are we living in the same dimension / universe???


Do you know what sarcasm is?

Anonymous said...

Yeah those Republicans Nixon (Pullued us of the Gold Standard) and Greenspan (Do I even need to say anything???) sure helped forestall our economic problems.


It was George Schultz who pulled the plug on the Bretton Woods System. RMN was only the talking puppet.

Edgar said...

Vote a po' man for president. I'd rather have a skid row bum in the white house than the mafioso we have now.

Anonymous said...

FDR bashing is really stupid. Why the f@ck do you think the US population of that time put him into office 4 different times?

They knew what life had been like under Wall Street, Herbert Hoover etc.

Now the same lesson of FDR needs to be taught again, and yet all you morons can do is show your ignorance of history and your contempt of republican principle.

FDR was not a socialist, tool of international bankers or any of the other misnomers. He was an American System President influenced by the works and policies of Alexander Hamilton.

He saved the United States from early destruction. We need to use his policies and leadership during this crisis.

Anonymous said...

"i always thought fannie and freddie had strict guidelines for borrowing. how did they ever get mixed up in this sub prime mess?"

Bubba Clinton put a corrupt, incompetent crony named Franlin Raines in charge. The books are so screwed up no will ever know how much he and his buddies stole."

Was Raines really in charge? Bush and his cronies REALLY believed in this ownership society. FNM and FRE were possibly used to institute this ideology. In such a case, anyone Pro-Free-Lunch could run these places.

The situation is extremlly complex and I'm amazed to see how little out there grasp the Big Picture yet think they do.

Anonymous said...

Bitterrenter,

I agree with everything you said but I'd like to add that if South America is the way it is, it's mainly because of America.

South America was becoming socialist... that meant less resources for America and less profits for American fat cats.

America didn't like it at all. They exported Friedman's free economy ideology and went on a commie witch hunt, basically insituting the current totalitarian and/or defective regimes.

America got its practice in South Amercia and did it in a more gentle manner in its own country by brain-washing its own people into believing in capitalism and free markets.

The middle class got so comfortable that it actually fell for the belief that each one of them had the opportunity to reach upper class in a free market regime.

Anonymous said...

Don't get me wrong....

I put down Republicans and their free market ideology but I would not say that Democrats are currently much better.

IMO, the system is FUBAR.

Anonymous said...

There's no need to worry... Fannie and Freddie have extremely strict lending standards. Just read this article... you'll see... buhahahaha

http://tinyurl.com/29mej3

drbungis said...

Biterrenter said...

"And if money is so dirty, why do you Ron Paul cultists relish your little $4 million day?"

Ron Paul collected close to $0 from special interest groups...most if not all money comes from individual donors. Republi-crats collect from banking, realtors etc. See the difference? If you don't, there is a problem with you - you have been brainwashed.

Anonymous said...

All throughout history, conservatives of their age have bitterly fought liberals, in the name of upholding principles of dead liberals.

Bitterrenter said...

Dr Bungis,

We're all part of some special interest. And some of the groups listed that contribute to democrats are also simply groups of people with a similar agenda: Human Rights Campaign, Emily's List, etc., just like your agenda is probably very similar to the people who contributed to Ron Paul.

When MoveOn started it was considered (and still is) a collection of individual contributors. Now that they're established they are seen as a "special interest group". See how that works? You Ron Paul cultists didn't invent it.

Anonymous said...

Yea, those republi-scheittstains get to eat their bush built scheitt sandwiches too, very very soon!

Anonymous said...

Here is the republican mantra.

1) Phuck you, it's all about me.

2) Of the corporations, by the corporations, and for the corporations.

3) Are there any little boys in the house???? ROTFLMAO

Bush is the best thing that ever happened to my country. He single handidly persecuted this evil vile party into extiction forever with such utter contempt for my country! For this I am grateful.

Better to get the scheitt out sooner than later!

Anonymous said...

The one trait that I dislike the most about the Democrats is that they all seem to speak to adults like children. They come off like "I know whats best for you little child".

Oh, you mean sorta like:

"You shouldn't be able to get an abortion because it's against my religion -- and I know what's best for you!"

Or how about:

"You gays shouldn't be able to get married because I think that's bad. I'm trying to protect you and society from yourselves!"

Or perhaps:

"That television and radio should be banned because it's immoral, and if people see violence or sex on TV, they mindlessly become violent! You need us to protect you!"

Or even:

"You Iraqis should go for western style democracy. We're going to invade your country based on bald-faced lies and force our style of government on you because we know best!"

Democrats and Republicans (including Ron Paul) are all part of the con game. If you vote this upcoming election, do yourself a favor and vote Libertarian -- get a candidate who isn't part of the corrupt system (and one who has a support base consisting of people who aren't stupid, myopic jackasses like the GOP moron who insists that only the Democrats try to control our lives and speak to us like children).

Anonymous said...

Warning!

You had better check what is in your 401(k), or bank & brokerage money market fund holdings. I did, and made an immediate change to a fund that had only Inflation protected treasuries in it. At least I had the option.

Here's what the money market fund had in it:

FED HOME LN DISCOUNT NT, 7/27/07 6.7%
FANNIE DISCOUNT NOTE, 7/11/07 4.7%
FREDDIE MAC DISCOUNT NT, 8/6/07 4.6%
FREDDIE MAC DISCOUNT NT, 8/13/07 4.6%
FANNIE DISCOUNT NOTE, 8/15/07 4.2%
FED HOME LN DISCOUNT NT, 7/13/07 3.8%
FANNIE DISCOUNT NOTE, 9/12/07 3.7%
FED HOME LN DISCOUNT NT, 7/5/07 3.5%
TREASURY BILL, 11/8/07 3.3%
FREDDIE MAC DISCOUNT NT, 9/10/07 3.1%
Totals 42.2% of assets


Top Sector Weightings
(as of 06-30-07)

Agency 65.9%

Corporates 26.4%

Treasury Bond 7.7%


Asset Allocation

Bond 100.0%

Average Credit Quality :

A1
Average Maturity :

1 year
Net Assets :

$2.9 billion

Energy and TIPS is where I see the safest short, intermediate and long term investment choices.

Another shoe to drop will be when these money market fund holdings start to default. Coming to an account near you.....

drbungis said...

Biterrenter,

I agree, to some extent, that part of Democrat donations come from organizations like HRC which are fairly non-commercial and as such have no (or have very little) commercial agenda.
Still, RP does not have contributions from the realtor and banker groups, while republicrats have. Hence, his decisions, as opposed to generic R and D decisions, are less influenced by "Big Money". Why do the realtors give money to Democrats and Republicans and not RP? Because they realize that his vote can not be bought...and republicrats' votes apparently can...otherwise the money would be wasted. By the way, I would vote for Kucinich or Gravel also...it does not matter if the President is Dem or Rep...it would be nice to have a honest one for a change.

Anonymous said...

The one trait that I dislike the most about the Democrats is that they all seem to speak to adults like children. They come off like "I know whats best for you little child

You are just another Republican Fascist™ working as a shill for the GOP, surfing the blogs that you think are liberal (this one is not, btw). You're right to be afraid because you will lose your Republican-paper pusher-boot licker job soon. Nobody cares about your type here. Try Ben's blog.

ApleAnee said...

Anonymous said...

The one trait that I dislike the most about the Democrats is that they all seem to speak to adults like children. They come off like "I know whats best for you little child".

Oh, you mean sorta like:

"You shouldn't be able to get an abortion because it's against my religion -- and I know what's best for you!"

Or how about:

"You gays shouldn't be able to get married because I think that's bad. I'm trying to protect you and society from yourselves!"

Or perhaps:

"That television and radio should be banned because it's immoral, and if people see violence or sex on TV, they mindlessly become violent! You need us to protect you!"

Or even:

"You Iraqis should go for western style democracy. We're going to invade your country based on bald-faced lies and force our style of government on you because we know best!"

Democrats and Republicans (including Ron Paul) are all part of the con game. If you vote this upcoming election, do yourself a favor and vote Libertarian -- get a candidate who isn't part of the corrupt system (and one who has a support base consisting of people who aren't stupid, myopic jackasses like the GOP moron who insists that only the Democrats try to control our lives and speak to us like children).

November 24, 2007 8:56 PM

Kick Ass Post. Mostest excellent I have ever read. Damn.