U.S. considers takeover of two mortgage giants

[Yurt]

Alarmed by the growing financial stress at the nation's two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

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.

The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.

http://www.iht.com/articles/2008/07/11/business/11fannie.php

is it just me or is this against the what is supposed to be the republican party platform? why should the taxpayers shoulder their debt? smacks of a nanny state to me.

[Dilloduck]

Alarmed by the growing financial stress at the nation's two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

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.

The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.

http://www.iht.com/articles/2008/07/11/business/11fannie.php

is it just me or is this against the what is supposed to be the republican party platform? why should the taxpayers shoulder their debt? smacks of a nanny state to me.

I'm afraid both party's platforms get jacked around by the realities that just can't be avoiding without REALLY rocking the boat. Pigs are still pigs no matter how much lip stick politicians want put on em.

[manu1959]

nationalized banking...............*shakes head....pours more wine*.....

[Dilloduck]

nationalized banking...............*shakes head....pours more wine*.....

To be followed soon by internationalized banking.

[manu1959]

To be followed soon by internationalized banking.

how many swiss banks have failed?

[Yurt]

To be followed soon by internationalized banking.

interesting...one world order, bush, his father's son, seems to fall in line

[Yurt]

how many swiss banks have failed?


You need to protect your savings from the current fragility of the U.S. banking system as well as the devaluation of the U.S. dollar. You need to open a savings account in the most financially stable country, with the lowest inflation rate in the industrialized West, with the world�s most stable currency...the Swiss franc!

Switzerland�s banking environment is dramatically different from that of the U.S. The private banks in Switzerland conform to much more conservative business practices than banks in the U.S.

Swiss banks have a reputation for being ultra conservative in their financial dealings and lending practices, thus minimizing the risk of loss for those holding a percentage of their net worth in deposits at Swiss banks
http://www.lifewhataconcept.com/finance/swiss/swiss.php

[gabosaurus]

Typical Bush, bailing out Big Business and forcing the average American to suffer the consequences.

[Yurt]

Typical Bush, bailing out Big Business and forcing the average American to suffer the consequences.

the rich are taxed too :poke:

[5stringJeff]

For those that don't know, Freddie Mac and Fannie Mae are already government-run "hybrid" companies. They trade publicly, but they are run by government laws and regulations, and are supposed to put the "fll faith and credit of the United States Government" behind every loan they guarantee.

[Psychoblues]

And propping up failing financial markets while ignoring the victims of unfair marketing is a sound decision of the profitteers? What A Goddamned Concept!!!!!!!!!!

[5stringJeff]

I didn't say they should prop them up. I think they should let a bank or two fail. That will give the system a quick kick in the ass.

[JohnDoe]

For those that don't know, Freddie Mac and Fannie Mae are already government-run "hybrid" companies. They trade publicly, but they are run by government laws and regulations, and are supposed to put the "fll faith and credit of the United States Government" behind every loan they guarantee.


Isn't this the case with every bank Jeff?

For the record, this is the WORST THING our gvt could do with OUR TAX MONEIES imho, it will ONLY devalue the dollar once again, and once again, make gas prices go up.

It is utter bull that they should be bailed out with our money as it was for Bear Stearns to be bailed out with our TAX money.

These companies are PUBLIC companies, SOLD to people on the Stock Market....

They can kiss my grits if they want me to bail them out NOW, when they are "hurting" ......when they made millions pulling their irresponsible crapola in previous years.

UTTER Balogna!

jd

[Psychoblues]

Now, that's a strong thought, jeff!!!!!!!!


I didn't say they should prop them up. I think they should let a bank or two fail. That will give the system a quick kick in the ass.

But, the failed industry is what is being propped up. The victims of the malfeasance on the industry's part are being ignored and even punished. How many Enron's, Worldcom's and countless other crooks will be allowed to steal the money and run before the "government" again requires some semblance of national, state and community responsibility? Tell me, jeff? I know you really can tell me!!!!!!!!!!!!!!!!!!

[5stringJeff]

If the federal government quits trying to "help" the banking industry and lets a bank fail without coming to its assistance, the remaining banks will clean their acts up really, really quick. That's the best cure for what's ailing us right now.

[Psychoblues]

Is this the freakin' twilight zone or what?




If the federal government quits trying to "help" the banking industry and lets a bank fail without coming to its assistance, the remaining banks will clean their acts up really, really quick. That's the best cure for what's ailing us right now.

What happens in the ending? Do the victims achieve any redress?

[5stringJeff]

Is this the freakin' twilight zone or what?





What happens in the ending? Do the victims achieve any redress?

You mean people with money in deposit in the bank? The FDIC insures such accounts up to $100,000 each.

[mundame]

Well.

Banks fail all the time, and they are failing in the U.S. at a rate four times higher than last year.

However, Fannie and Freddie aren't just any banks! They hold or guarantee 50% of all American home mortgages!!!!! They are the largest company of ANYTHING, that's anything at all, in the world. Heard that last night on CNBC.

If they fail, so does Western Capitalism.

So I suggest we shut up and let the government prop them up.

Or, we could keep talking, but be sure, the government is GOING to prop them up, if it can.

[avatar4321]

Is this the freakin' twilight zone or what?





What happens in the ending? Do the victims achieve any redress?

When a business fails, who exactly is the victim?

[5stringJeff]

Well.

Banks fail all the time, and they are failing in the U.S. at a rate four times higher than last year.

However, Fannie and Freddie aren't just any banks! They hold or guarantee 50% of all American home mortgages!!!!! They are the largest company of ANYTHING, that's anything at all, in the world. Heard that last night on CNBC.

If they fail, so does Western Capitalism.

So I suggest we shut up and let the government prop them up.

Or, we could keep talking, but be sure, the government is GOING to prop them up, if it can.

Well, if they fail, the US Government is on the hook for about $5 trillion, which would certainly force the government to rethink its freerolling ways. It would not, however, be the end of all capitalism worldwide.

And, frankly, why does the government need to be in the business of guaranteeing mortgages anyway?

[Hagbard Celine]

Alarmed by the growing financial stress at the nation's two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

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.

The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.

http://www.iht.com/articles/2008/07/11/business/11fannie.php

is it just me or is this against the what is supposed to be the republican party platform? why should the taxpayers shoulder their debt? smacks of a nanny state to me.

Uh, DUH! The Bush Administration strikes again. I don't know why Bush and Chavez aren't better friends. They have so much in common! :dance: