Feds take over Fannie Mae and Freddie Mac

[○∙◄☻¥tπ[╪AV┼cVê└]

Another tens of billions of dollar bailout by the taxpayers for the mortgage industry.

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More at

http://www.nytimes.com/2008/09/06/business/06fannie.html?_r=2&hp=&adxnnl=1&oref=slogin&adxnnlx=1220674986-mZyKPGBhjqpS16deJTadUA

[NDN]

Guess pulling yourself by your bootstraps is only for the little people, huh?

[Torie]

This is a HUGE story if true. I could rant on and on about Fannie and Freddie. The moral hazard they posed makes a kid riding a motorcycle without a helmet and no assets of health insurance seem like child's play. This moral hazard is going to cost the Feds hundreds of billions of dollars. Real estate prices have not hit bottom yet in a lot of places.

[Sam Spade]

Ugh...  A little regulation with how these companies gave loans could have helped a lot.

[Torie]

Ugh...  A little regulation with how these companies gave loans could have helped a lot.

Maklng deregulated loans with an implicit  government guarantee is insane of course. But beyond  that, there outfits were political entities first and foremost, and a part of the K Street iron triangle. It was a great source of patronage and politician  directed and  influenced loan making to friends of the connected. Loan vetting slowly degraded, the better to roll in the "profits." The whole thing is another example of the evils of government getting involved in directing who gets credit, and who doesn't. The money is free!

In an irony, that is somewhat entertaining, I think the stock of Fannie and Fred went up today, but don't hold me to that. The rumor was out, that the Feds were going to "help." However, the zero out of the equity holders, or near zero out, apparently was not part of the leak.

[Queen Mum Inks.LWC]

More government involvement that'll wind up killing us in the end.

[All aboard the Carney-val]

Modern conservatism: Privatize the profit, socialize the loss.

I hope the board gets turfed out without any golden parachute, and the companies winded down.

[○∙◄☻¥tπ[╪AV┼cVê└]

More government involvement that'll wind up killing us in the end.

You do realize that these savings and loans problems started with Reagan's deregulation? Any how, it's pretty clear which candidate would be better on this issue. Hint: it's not the one involved in Keating Five.

[Queen Mum Inks.LWC]

More government involvement that'll wind up killing us in the end.

You do realize that these savings and loans problems started with Reagan's deregulation? Any how, it's pretty clear which candidate would be better on this issue. Hint: it's not the one involved in Keating Five.

This has nothing to do with the election.  The 2 will have been taken over by then.

Besides, I don't think the government should be bailing either these companies or private citizens (Economic Stimulus Package).  I disagree with McCain's vote for that, and we don't have a vote from Obama.  But I agree with Hagel, and I'd have been one of the 16 Senators who voted Nay.

[falling apart like the ashes of American flags]

It'd be a glorious day if Fannie and Fay ever went bankrupt and DIDN'T get bailed.

[opebo]

This is a HUGE story if true. I could rant on and on about Fannie and Freddie. The moral hazard they posed makes a kid riding a motorcycle without a helmet and no assets of health insurance seem like child's play. This moral hazard is going to cost the Feds hundreds of billions of dollars. Real estate prices have not hit bottom yet in a lot of places.

Actually this is just good Keynesianism.  What you blinkered right-wingers call 'moral hazard' is just the demand-push fix for that which is inherently unworkable about capitalism.  In other words the 'free money' as you call it is necessary to make the economy work well and grow. 

I have only two comments:  1) Perhaps now we can get over the ridiculous claim that housing for middle class white people is 'private';  it is subsidized government housing and has been every since a white working class 'middle class' was created by the Democrats (1930s-1970s), and 2) We can now easily see the part of the the Keynesian fix that has been missing these last 30 or so years: Government sponsored income growth for the working class.

[Sam Spade]

Ugh...  A little regulation with how these companies gave loans could have helped a lot.

Maklng deregulated loans with an implicit  government guarantee is insane of course. But beyond  that, there outfits were political entities first and foremost, and a part of the K Street iron triangle. It was a great source of patronage and politician  directed and  influenced loan making to friends of the connected. Loan vetting slowly degraded, the better to roll in the "profits." The whole thing is another example of the evils of government getting involved in directing who gets credit, and who doesn't. The money is free!

In an irony, that is somewhat entertaining, I think the stock of Fannie and Fred went up today, but don't hold me to that. The rumor was out, that the Feds were going to "help." However, the zero out of the equity holders, or near zero out, apparently was not part of the leak.

Thanks for expressing this in a more detailed way than I could.

Interestingly, the historic pattern is that Republicans always wanted more regulation Fannie and Freddie than Democrats.  Unfortunately for us, neither party made it happen.

[○∙◄☻¥tπ[╪AV┼cVê└]

Ugh...  A little regulation with how these companies gave loans could have helped a lot.

Maklng deregulated loans with an implicit  government guarantee is insane of course. But beyond  that, there outfits were political entities first and foremost, and a part of the K Street iron triangle. It was a great source of patronage and politician  directed and  influenced loan making to friends of the connected. Loan vetting slowly degraded, the better to roll in the "profits." The whole thing is another example of the evils of government getting involved in directing who gets credit, and who doesn't. The money is free!

In an irony, that is somewhat entertaining, I think the stock of Fannie and Fred went up today, but don't hold me to that. The rumor was out, that the Feds were going to "help." However, the zero out of the equity holders, or near zero out, apparently was not part of the leak.

Thanks for expressing this in a more detailed way than I could.

Interestingly, the historic pattern is that Republicans always wanted more regulation Fannie and Freddie than Democrats.  Unfortunately for us, neither party made it happen.

Reagan removed some of FDR's regulations.

[Хahar 🤔]

Bailout is good, provided the feds completely reorganize them. Of course, that's not happening.

[cannonia]

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No, Fannie and Freddie are examples of Democratic Party graft, not modern conservatism.

[??????????]

Since we're taking this one, can we get KY this time?

[Хahar 🤔]

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No, Fannie and Freddie are examples of Democratic Party graft, not modern conservatism.

[Daniel Adams]

No, Fannie and Freddie are examples of Democratic Party graft, not modern conservatism.

He is right.

[opebo]

No, Fannie and Freddie are examples of Democratic Party graft, not modern conservatism.

He is right.

Actually this sort of semi-private compromise to get good Keynesian economic policy through has always been required of the center-left in the US.  In other words unless the controlling elite could be persuaded that they would benefit it would not be passed.  And anyway such 'graft' is not really a negative - its just not a positive as the extra funds go to elites who don't contribute to demand-growth instead of to the workers subsidized housing.

I'm all for what was done to provide housing to the masses - only government can provide them with decent housing and home ownership, as well as boost the economy.  However, the missing link which caused this system to topple was removed by the Rightwingers - government provided income growth for the working class.   Without government intervention to make sure that workers get a share of the national income and their own productivity, their income steadily dwindles under the current government imposed system of 'laissez-faire' capitalism.  Thus, we were left with the government housing, but forgot that we had to have high incomes for workers so that they could pay off the subsidized loans without defaulting.

As an aside, let me say that the housing bubbles of the last couple of decades, which lead to busts like the one that brought down fannie and fready, are caused because rightwingers attempt the absurdity of managing the economy with only one 'lever' - that of interest rates.  Their ideology blinds them to practical understanding of the economy.   If government managed income growth for workers - even if indirectly through the mechanism of full unionization - there would be no need to keep lowering the interest rates to negative (in real terms).  Rates could be kept a lot steadier if we fully utilized good Keynesian policy to prevent busts.

[Torie]

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And there you have it. I think we should pass a law making the median income 100K myself.

[opebo]

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And there you have it. I think we should pass a law making the median income 100K myself.

'Managed' implies making the best of the situation by practical means, Torie, not impractical or fantastical means.  What's the name of your fallacy here?  Slippery Slope?  Ir Straw Man?  I can't remember.

But certainly about $100,000 is a reasonable figure upon which to support a family in most of the country.