Fannie Mae, Freddie Rescue a `Disaster,' Rogers Says (Update1)

Source: Bloomberg



By Carol Massar and Eric Martin

July 14 (Bloomberg) -- The U.S. Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and the largest U.S. mortgage lenders are ``basically insolvent,'' according to investor Jim Rogers.

Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson's request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. The chairman of Rogers Holdings, who in 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, also said the commodities bull market has a ``long way to go.''

Fannie Mae and Freddie Mac each surged more than 20 percent in pre-market trading today after Paulson moved to stem a collapse in confidence in the two companies that purchase or finance almost half of the $12 trillion in U.S. home loans.

``These companies were going to go bankrupt if they hadn't stepped in to do something, and they should've gone bankrupt,'' Rogers, 65, said from Singapore.



Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=av8pcGLz4lr8&refer=us

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The rape of our treasury for the benefit of the cabal continues. Bailouts for the filthy rich, lectures to stop whining for working families.

either way

a financial meltdown worse than we have seen thus far. I don't think the system could take that one.

They hold > $5 trillion in mortgages. If housing values continue to drop precipitously - and there's no evidence that they won't - Fannie and Freddie could be sitting on hundreds of billions or perhaps even a trillion in debt. The government can't stanch that flow, it's just too big.

So we'll likely get the crash anyway, but now the taxpayer also gets fucked. We The People are simply buying time for The Predator Class to unload there problems on someone else.

60 million people went to subsistence living just like that.And the G8 forced this on russia while Gorbachev's plan for real democracy was shelved.Huge huge theft. Yes they are melting it down but so far it's not really quick; eventually a 1/4 of us will be scrounging in the streets for food and no leadership, including obama, is standing up. It' not happening, it's not happening , holy shit it happened.

obfuscated, obscured, and denied the inevitable for almost 30 years and the longer we wait, the worse it gets. Well now there are no more places to hide, nothing left to devalue, and nothing to ship out of the country to make the numbers look good while producing nothing.

The piper has come to collect.

economies as well, since the US (financial superpower) would go under first.

Actually they are insovent and it is not clear that this bail-out manages to rectify the insovency. instead it may just be transferring the insolvency over to the treasury. I think that was roger's point.

They hypocrisy is what gets me. You and me, we can go belly up, lose our houses, die from inability to afford decent healthcare, and that is our problem for not being successful. Huge corporations just get a check from my tax dollars to tide them over when times are tough. What total bullshit. What a screwed corrupt system.

the OFHEO (Office of Federal Housing Enterprise Oversight), the only agency that can truly do so), you will see something much worse than the Great Depression in this country and a domino affect around the world.

You can cling to that "neither has been declared insolvent..." point all you want. The reason why they are now hooked to a direct tap on the treasury is that they effectively went belly up last week.

But their official status with respect to solvency is beside the point. The point is that we have corporate welfare for them and free market fundamentalism for us. For the peasants it is an outrage that younger workers pay for older worker's pensions. For the corporate elites, it is necessary to protect their assets when their institutions stumble and fall with workers tax dollars. If you or I reach bankruptcy, why the MBNA bankruptcy law made sure that we would get little relief in that, regardless of what the cause of our financial demise might be. Bear Sterns falls on its face and we taxpayers make sure that the owners get a great deal in a buyout and walk away with millions.

Didn't we read just yesterday that this really will be the last corporate bailout, for.ever.? (It's odd that news reporters never seem to use the sarcasm tag.)



Basic trading and barter (not that I'm any expert): I'll give you X amount, in return you give me ______ .

According to the head of OFHEO, James Lockhart …

“OFHEO has been monitoring and continues to monitor closely Fannie Mae, Freddie Mac and the mortgage and financial markets. As one would expect, we are carefully watching the Enterprises’ credit and capital positions.”

“As I have said before, they are adequately capitalized, holding capital well in excess of the OFHEO-directed requirement, which exceeds the statutory minimums. They have large liquidity portfolios, access to the debt market and over $1.5 trillion in unpledged assets.” - July 10,2008

but the magnitude is so great that it still has to be done. You can't let holders of $5-6 trillion go belly up without affecting all of us. No one would be left unscathed.

FNMA and FRMC have a unique public-private status, and there's a certain rationale in this case.

I do think the public should get some benefit from the bailout in the form of the stock, etc.

Profit is a corporate goal. It cannot be a government goal.

Think of all the commissions that were taken out along the way. They saddled these companies with all these fees and now they are saddling us with the expense.

I agree, these companies SHOULD GO BANKRUPT and they can be replaced by another public sector program as they began. THE INVESTORS SHOULD LOSE THEIR MONEY. Thats what happens when you make terrible business decisions in the pursuit of greed. The mortgages would simply be bought out by other companies.

Step right up sucker.

IE... A Citimortgage that Fannie guarantees.

If the homeowner defaults, the entity that holds the paper on guaranteed loans gets paid..by taxpayers since Fannie and Freddie are (and have been for several years) broke.

And us suckers taxpayers get the tab, but we don't see a penny in profits.

if freddie and fannie were to go belly up

he is also spews his pro Chinese propaganda to serve his financial interests

he has been calling for increasing interest rates. what do you think would happen if they did that

...and still millions of homeowners will end up on the streets

and these bankers and investors really have turned into big whiners.

continental airline goes out of business..... cry cry cry.... who gives a shit... someone else picks up the routes... people fly
so long as pensions are protected why would any of us give a fuck if some rich bastard company dies off... replace it with a healthy one.

PRICE OF GOLD GOES UP the market cheers...... but isn't that the same as VALUE OF DOLLAR DROPS AGAINST GOLD....... public shakes with fear

it is ALL in the wording

MASSIVE INFLATION... that is my greatest dream... the house payment i have today will be an hour's wages in the future

STOCK MARKET FALLS DRAMATICALLY... like i OWN any stock... let the rich bastards lose all their cash... the GREAT EQUALIZER

........ if you want to help the economy... let's check out this logic...
TRICKLE DOWN ECONOMICS... give the rich more and they will "spread it among the poor"
what a bunch of Reganocrap.... they spread it by buying what every poor person wishes they could afford and raising
the price to compete for those goods... lobster goes UP $20 and they buy one
TRICKLE UP ECONOMICS... give the poor more and IT IS ALREADY SPREAD
raise the minimum wage, give a stack to old people and poor and lower-middle... that money will HIT THE STREET in a minute
and it will be spent BY AMERICANS IN AMERICA

WE ARE IN SCHOOL.... AND THIS IS CLASS WARFARE.... what is good for the wealthy is NOT GOOD for me
THERE ARE ONLY SO MANY GALLONS OF GAS..... i want anything that will GET ME MINE
MORE FOR US..... less for THEM

....... UNIONS YES..... RAISE MINIMUM WAGES YES.... RAISE UNEMPLOYMENT MEDICARE MEDICAL SOCIAL SECURITY....YES YES YES

rip from the wealthy....

anything resembling SUBTLE went out the door when DUBYA and his WEALTHY STORMTROOPERS bought the government

But your mortgage bill will not. More likely you and thousands like you will be fired because your company cannot make a profit after paying energy costs which includes price hikes on everything that has to be shipped.

either inflation works for you OR NOT...

for ME it would work out well..... my debts are HUGE and the bottom of the market will rise enough to keep me afloat...

debtors love inflation...

not everything works for everyone..... IN ADDITION.... rich people have MONEY... many hold onto BONDS...

a good bout of DOUBLE DIGIT inflation would do me fine

MONEY IS ONLY "IN YOUR MIND"....

gold going up in value is great.... IF YOU OWN GOLD.... otherwise it is better if it goes DOWN
cash going up in value is great.... IF YOU OWN CASH.... otherwise it is better if it goes DOWN

ALL OF THE PHONY INDICATORS OF THE ECONOMY ONLY APPLY TO THOSE WHO HOLD THOSE ITEMS...
otherwise WHAT SUCKS FOR THE WEALTHY IS GENERALLY GOOD FOR ME... they compete less for the goods i want when they are hurting

Since our party has largely abandoned populist economics in favor of the culture wars, I'm just glad that Democrats are going to have a chance to get back to its roots rather than running to the right. When given the choice, the people will buy the original article. When it comes to pacifying business, that's the Republicans. We can't be a copy. We must return to caring just as much about labor organizing, raising hell at big business and good old-fashioned populist economics as we do getting angry about FISA or corruption, etc. Not that we shouldn't address those issues, but it's been for 20 years now, at the expense of what made Democrats different!

And it seems many are engaged in this issue. We avoid discussing economic issues from a populist perspective at our own peril. I fully agree our elected representatives (save but a tiny few) are all busting their butts for big business.

Thanks, George!

Especially first time, middle to low income?

I thought that was the, er, POINT of their private/public status--they have goals OTHER than JUST profit for their stockholders. (Increasing home ownership, lowering the barriers to same, helping low and middle income buyers afford a mortgage, etc.?)

If they go belly up, won't that go away, leaving us with ONLY what the unadulterated "market" (aka, the Theiving Class) wants to sell us?

I'm not an economist and have only a consumer's-eye-view of the mortgage situation, so, if I'm wrong, please educate me. I can see how bailing out Countrywide, or some other private lender would be a giveaway to the filthy rich, but how so for Fannie and Freddie?

them with the bill.

Fascist Kleptocracy?

and capitalism for average people needing government assistance.

In the meantime, the Fed undermines the Dollar and inflation spirals upward!

JANUARY 20TH CANNOT COME SOON ENOUGH!

I hope we still have a viable financial system. :nuke:

He is sounding the alarm bells. He sees the M3 money supply numbers and knows exactly where this is heading...a hyperinflationary depression.