July 11, 2008

And then they lost control



Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee — which could be staggering — would be paid by taxpayers.

37 comments:

eric in vegas said...

Get those printers fired up!

BMW Driving Sex Machine said...

Check this out. Some analyst today also said that both are already completely insolvent and Freddie Mac not just bankrupt, but 5 billion in debt!

July 11 (Bloomberg) -- Treasuries fell the most in three weeks after the New York Times said the U.S. may take over Fannie Mae and Freddie Mac if they keep deteriorating.

Notes slid and Asian stocks rallied as the newspaper reported the government may place the two-largest buyers of U.S. home loans under conservatorship, citing unidentified officials briefed on the plan. Ten-year yields may rise because efforts to help the companies ``should cause the flight-to-quality bid to fade,'' Bank of America Corp. strategists led by Michael Cloherty in New York wrote in a report yesterday.

``The government needs to bail out those companies,'' said Akira Takei, the general manager for international bonds at Mizuho Asset Management Co. in Tokyo, who helps oversee the equivalent of $37.3 billion. ``That will be bad for the U.S. Treasury market.''

The yield on the benchmark 10-year note increased 7 basis points to 3.86 percent as of 7:33 a.m. in London, according to bond broker BGCantor Market Data. The price of the 3.875 percent security due in May 2018 declined 17/32, or $5.31 per $1,000 face amount, to 100 3/32. A basis point is 0.01 percentage point.

The MSCI Asia Pacific Index of regional shares rose 0.3 percent, erasing an earlier loss and curbing demand for debt.

Fannie Mae slid 14 percent yesterday to $13.20 in New York, down 67 percent this year. Freddie Mac declined 22 percent to $8. Their shares are plunging and their borrowing costs are climbing as investors speculate losses at the companies totaling $11 billion in recent months will keep increasing, the newspaper report said.

Lost Cause said...

Damn! I wish I shorted those...

Anonymous said...

A REMINDER.....

The American sheeple deserve the government that they get for one simple reason.....

The vast majority of Americans are for lack of a better word...STUPID!!

Remember, 48% of the voters in 2000 chose a know-nothing Texas governor,alcoholic,cokehead,faux christian,Yale Skull&Bones fratboy who ran two oil companies into bankruptcy (at the height of the oil boom in Midland,Tx. during the late 1970s?) and as a major shareholder of the Texas Rangers,decided to trade one of the greatest ballplayers of all time..Danny Sosa! I will always treasure this account from THE REAGAN DIARIES when the late Ronald Reagan was introduced to Bush Sr. during the 1980 presidential campaign.."I met with George Bush and his nerdowell son.."

48% chose in 2000 to wipe out a budget surplus needed to shore up Social Security and Medicare for the upcoming tidal wave of retiring baby boomers.

48% chose economic policies to destroy the US Dollar.

48% chose to have their jobs outsourced through aggressive 'free trade agreements'

etc.etc.etc.

SWEEEEEEEEEEEET JUSTICE....
The state that caused the 2000 US Supreme Court 'selection' of W is in the middle of the worst housing foreclosure crisis since the Great Depression and deserves it!!

To the 48 % who voted for Bush....

YOU DESERVE FORECLOSURE!!

Anonymous said...

Oliver Stone's "W" is slated for release during Halloween and how appropriate!

Besides Josh Brolin (Oscar winner for "No Country For Old Men") playing Bush Jr., Ellen Bursten is cast as Barbara Bush (Her most famous role is that of the mother of Linda Blair in "The Exorcist").

HAPPY HALLOWEEN!!

Anonymous said...

Everything is fine. People are lining up to buy the new iPhone 3G. The state of the Union is strong.

DOPES

John said...

Sooooo Fuuucckkkkkkk'd it's not funny.

The world's only Superpower. Not.

Anonymous said...

"48% chose"

Massive vote fraud, especially in battleground states has been thoroughly documented. Between the 5-4 supreme court decision and Diebold (plus many other illegal disfranchisement tricks brought back from the Jim Crow days)I for one am convinced America never elected W and did not want him as president.

i've had it said...

Fannie and Freddie will be bailed out by the Feds...no doubt about it. They will be bailed out with whatever taxpayer money it takes to do it. And yes, that means the renters will be bailing out the home debters.

Totally unfair but the Lefties will demand compassion from the responsible ones (like HPers) and pick our pockets - once again - to make society better.

SENATE FOA COMMITTEE said...

JESSIE JACKSON IS CUTTING THE WRONG GUYS' NUTS OFF...

DOPES!!!

SUZANNE!!!

SWAN!!!

ANON!!!

Anonymous said...

It was pretty ugly yesterday morning on CNBC. Ben had Greenspan as backup, but it did no good.

Anonymous said...

>"48% chose"
>Massive vote fraud, especially in battleground states has been thoroughly documented. Between the 5-4 supreme court decision and Diebold (plus many other illegal disfranchisement tricks brought back from the Jim Crow days)I for one am convinced America never elected W and did not want him as president.


Good Lord. You sir are as demented and hopeless as the far right Clinton haters.

holyschlitz said...

So yesterday when Paulson said they were adequately funded.....was he just flat out lying to the American people or is he just that clueless? The sad thing is that this is just the continuation of the taxpayer rape that has been going on for years. If any company is "to big to fail" then they are to big to exist and should be broken up. Personally I don't think any company is to big to fail, let it happen and watch the markets start to correct down to realistic levels.

The Housing Bubble Ate My Balls said...

As of 9:36AM
FNM 7.25 -5.95 (-45.08%)
FRE 4.07 -3.93 (-49.12%)

Is today the day it unwinds??

kilgore said...

Please Mr. Obama, please please please find the courage to spend an extra $600BN a year on health care (50MM uninsured x $1,200 a year per congressman on health care) so we can jump start this economy. Because even though it's a completely unproductive way to spend money, at least the dollars will be spent here!!! Just look at Roosevelt for an example of a well loved president.

Also, please have the courage to spend more on education and more on a government bailout of both Freddie and Fannie and any other creative ways you can think of to keep housing prices from killing this economy.

Seriously Mr. Obama, I hope you're aiming for Mt. Rushmore and not reelection. We need a genuine leader right now - someone who UNDERSTANDS that the only way to get us out of this mess is to INVEST our way out of it!

Batman said...

Holy rough ride Batman, FRE and FNM are in free fall! Let's see the ppt catch those falling knives!

Other 52% are sheeple too! said...

Man, I am supposed to trust a guy who can't even get one of the greatest baseball players names right? I assume you mean SAMMY Sosa?

The vast majority of Americans are for lack of a better word...STUPID!!

48% chose in 2000 to wipe out a budget surplus needed to shore up Social Security and Medicare for the upcoming tidal wave of retiring baby boomers.


Nice of you to prove your own point, sir. Not knowing the difference between a surplus and a "projected surplus" based on taxes on inflated capital gains in stocks is pretty sad. Even if you ignore the accounting of social security funds (the GAO does not in the their negative 55 trillion debt estimate, but just to stay "conventional", lets do it), the national debt has gone UP EVERY YEAR since 1957. If there was a surplus, where did it go?

The funny thing is that plenty of uninformed people want to blame all of our issues on the Bushes or the Clintons, when they have actually been systemic for about 95 years.

Anonymous said...

GREAT picture of two of the greatest financial minds in America.

Too Bad they don't work for the enemy...

Enjoy the DIE OFF.

vanilla ice said...

Seeing this car wreck in motion is so great. It'll be interesting to see what happens over the weekend.

Anonymous said...

Do we finally get a balance sheet?

Who gave the fed the power of the purse?

bitterrenter said...

Which political party presided over this mess? What political ideology has dominated the last 30 years of scandal, decline and deregulation? Oh, that's right,

THE REPUBLICANS AND CONSERVATISM!

You brainstems have NO IDEA how much this all thrills me. I get WOOD when I read your anguished, bitter complaints about the state of affairs. I get positively orgasmic when, despite the evidence of their culpability, you CONTINUE to show support for republicans.

I know that before I leave the earth I'm going to get to see you suffer greatly for your ignorance.

xoxo,

BR

Anonymous said...

So yesterday when Paulson said they were adequately funded.....was he just flat out lying to the American people or is he just that clueless?
----------------------------------

Why isn't the democrat controlled congress hauling his ass back in to testify why he lied?

I always knew the democrat congress could out do the republicans as something. unfortunately that something is sucking!

Peloser as speaker! ha, i knew they were doomed when they did that!

IMPEACH BUSH & CHENEY IMMEDIATELY said...

Apologies for the length of post. Just posted to my local hometown MSM paper (also worst ever INMO):

Welcome to George Bushco and Dick Cheneyburton's New Depression of 2008!

The economic consequences of Worst President Ever Bushco #43: http://www.vanityfair.com/politics/features/2007/12/bush200712

Impeachment Article against George W. Bush to be Introduced Thursday. WHERE IS THE MURKY NEWS coverage of this most momentous istoric event? Since the Murky won't reportit I WILL. Here it is Sheeple? Got Gas? Got Food? Got House? Got Future?

WASHINGTON, D.C. (July 8) -- Congressman Dennis Kucinich (D-OH) sent the following letter today to his colleagues in Congress: July 8, 2008 WHEN THE COMMANDER IN CHIEF LIES TO GO TO WAR, HE MUST BE IMPEACHED A SINGLE ARTICLE OF IMPEACHMENT WILL BE BROUGHT TO THE FLOOR ON THURSDAY; PLEASE CO-SPONSOR Dear Colleague, During the Fourth of July holiday a WWII veteran stood ram-rod straight in his crisp dress uniform and saluted our flag as it passed in a parade. His silent reverential stance was a powerful reminder of the love of country that is reflected in our veterans of all generations and all services. It is also a powerful reminder of the responsibilities of the President of the Untied States in his capacity as Commander in Chief. It is worse than heartbreaking that George W. Bush, as Commander in Chief, caused this country to go to war based on information which was false, and which he knew to be false. The consequences for our troops have been devastating. We have lost 4,116 of our beloved servicemen and women since the war began, with over 30,000 physically wounded and countless others emotionally wounded. The toll on the service persons and their families will be felt throughout their lives. There can be no greater responsibility of a Commander in Chief than to command based on facts on the ground, and to command in fact and in truth. There can be no greater offense of a Commander in Chief than to misrepresent a cause of war and to send our brave men and women into harm's way based on those misrepresentations. There has been a breach of faith between the Commander in Chief and the troops. Iraq had nothing to do with 9/11 or with Al Qaeda's role in 9/11. Iraq had neither the intention nor the capability of attacking the United States. Iraq did not have weapons of Mass of Destruction. Yet George W. Bush took our troops to war under all of these false assumptions. Given the profound and irreversible consequences to our troops, if his decision was the result of a mistake, he must be impeached. Since his decision was based on lies, impeachment as a remedy falls short, but represents at least some effort on our part to demonstrate our concern about the sacrifices our troops have made. This Thursday evening I will bring a privileged resolution to the House with a single Article of Impeachment of President Bush for taking our nation and our troops to war based on lies. We owe it to our troops who even at this hour stand as sentinels of America because they love this country and will give their lives for it. What are we willing to do to match their valor and the valor of their successors? Are we at least willing to defend the Constitution from the comfort and security of our Washington, DC offices? Sincerely, Dennis J. Kucinich Member of Congress

IMPEACH BUSH & CHENEY IMMEDIATELY. DO IT NOW.

went2puke said...

This post's picture of Bern reminds me of Saddam on trial, except that Saddam was more composed.. and that Saddam did much less harm to American's in 3 decades than this guy did in a single year! The world is upside down folks!

k.w. - Southern Ca. said...

The media (in all forms) lies to the public to prevent panic.

Well, our entire financial system is in ruins - the truth is out.

Trying to tax our way out of this will not work - but it's guaranteed to make matters far worse for the economy as well.

Anonymous said...

Start planting your banana trees now you're gonna need them in your new BANANA REPUBLIC!!

HAHAHAHAHAHAAAA!!!

DOPES!

PS - Andrew Hac has the KY ready for a slick penetration in your fat Americano snapper turtle ass!!

Anonymous said...

The world's only Superpower. Not.

_______

The USA used to be the world's biggest creditor nation, now it's the world's biggest debtor nation.

SOMEONE SCREWED UP.

All of our legislators should be tossed out next election.

PLEASE, PLEASE DO NOT VOTE FOR ANY INCUMBENTS!

Anonymous said...

The media (in all forms) lies
to the public to prevent panic.


_____

Sometimes. I would flesh out the statement by saying the media lies to the public to try to keep us distracted, anesthetized, ignorant, dumbed-down, fascinated with trivia like the latest fashions and who celebrities are banging, in fear of things that aren't likely to hurt us, in consumer mode we'll keep buying unnecessary things we can't afford....

Anonymous said...

Which political party presided over this mess? What political ideology has dominated the last 30 years of scandal, decline and deregulation? Oh, that's right,

THE REPUBLICANS AND CONSERVATISM!


__________

Hold on a minute.

Republicans have done their share to wreck things, no doubt.

But the Dems failed to stop the Iraq fiasco. The Dems have OK'd spending money we don't have so that the Fed would keep creating money and credit from thin air. Certain Dems got sweetheart loans from Orangezilo.

Today's neo-conservatives are a far cry from true conservatives. Ron Paul is the closest thing you'll ever see to a true conservative, and while he was able to raise a lot of money for his presidential run, a lot of people thought his extremely rational way of thinking sounded crazy. His squeaky voice didn't help much...not really very telegenic...but what an admirable man.

That's how far gone we are. The only sane, honest person in Washington speaks truth and reason, and he sounds crazy to the brainwashed masses.

Tragic.

Anonymous said...

I heard a rumor that Citi was looking into making a bid to buy Fannie & Freddie...then this happens today, and now Citi sells a bank...could it be to raise the cheddar to buy out (for PENNIES) Fannie & Freddie?

Anonymous said...

Sweet. I hope all those Libertarians who wanted to deregulate everything are losing their asses.

MrCoffee said...

i've had it said...
Fannie and Freddie will be bailed out by the Feds...no doubt about it. They will be bailed out with whatever taxpayer money it takes to do it. And yes, that means the renters will be bailing out the home debters.

Totally unfair but the Lefties will demand compassion from the responsible ones (like HPers) and pick our pockets - once again - to make society better.


-----------------------------------

Actually, you, me, and everybody else, regardless of how much or how little money we make, including Section 8 voucher holders who work at Micky D's and oil speculators, will be paying for this. We bet the farm on a service economy/ownership society, and lost!

MrCoffee

shtove said...

Superb picture - nice one!

shtove said...

Caption competition --

Bernanke: Oh crap, I ain't taking the fall for this ...

Paulson: I'm not the fall guy. I CAN'T be the fall guy. Master of the Universe, they said, p-p-pension guaranteed!

Anonymous said...

Sweet. I hope all those Libertarians who wanted to deregulate everything are losing their asses.

_________

Lack of regulation is certainly part of this meltdown, I can't argue that one.

What really should have been regulated was the amount of money and credit that got created out of thin air. And then, once it was created, whom it got lent to should also have been regulated.

But when you start with unlimited creation of money, far beyond real economic growth, misery won't be far behind the orgy of spending that goes before.

Libertarians, as far as I know, don't advocate unlimited creation of money. This is the root of our current problems and I don't think it's based on a libertarian philosophy. NEWS FLASH: libertarians aren't in charge of this country.

This meltdown has the fingerprints of the NEOCONS and the WACKY LIBERALS, who ARE in charge. Starting a war we can't afford, pumping money into the system and letting people borrow it who would never be able to pay it back, trying to solve the crises with bailouts on the backs of the already severely stressed taxpayers...all of this was devised by neoconservatives (who are fiscally wildly liberal) and wacky left-wingers -- you know -- the people in executive branch and the halls of Congress who let all of this happen...nay, CAUSED it to happen through irresponsible lawmaking and policymaking. Most of 'em -- except for Ron Paul -- should be put on trial for treason.

Don't try to pin this on libertarians, it won't stick.

waikikiphotoblog said...

Keith,

I am an amateur photographer and appreciate well taken photos. This one of Hank and Ben, like many others in your blog, seems to say it all.

J at IHB and HFF said...

Hello. You might like what I did with your Bernanke-Paulson photo at the bottom of this post:

http://tinyurl.com/5thvww

Thank you.