Government Rescues Fannie and Freddie
The federal government will take over Fannie Mae and Freddie Mac, our largest and most troubled mortgage finance companies, with an estimated taxpayer price tag of $25 billion (one source told the New York Times that the number was a modest guestimate, though). In one of the county’s most expensive bailouts, the government can put…
The federal government will take over Fannie Mae and Freddie Mac, our largest and most troubled mortgage finance companies, with an estimated taxpayer price tag of $25 billion (one source told the New York Times that the number was a modest guestimate, though). In one of the county’s most expensive bailouts, the government can put up $100 billion for each company should they need cash — they handle about half of the country’s mortgages — and will encourage them to shrink their holdings; the Treasury can buy the two companies outright for a small pricetag, and is already changing the management team. The Fed sees the buyout as the silver bullet for the housing crisis, and already foreign markets have rallied since the announcement. Will it work, do you think?
In Rescue, U.S. Takes Over Mortgage Finance Titans [NY Times]
Fannie Mae. Photo by NCinDC.
Dave I’m not going back and forth with you today. If anyone believes this bail out is good then live accordly. Do out and buy something! Don’t worry about the bailout it’s just money anyway. Don’t worry about that 300 billion of taxpayer money, you are helping the Big boys.
The What
Someday this war is gonna end…
“do I sell my fannie and freddie stock”
bayridgegirl,
If you can get a dollar a share, that’s a buck more than nothing.
I don’t think DIBS is hurting for a job, What. My best guess is that he has a well established bail out plan for himself that is well under way. Once can only take but just so much corporate drama.
This story is a real snoozer. This will have almost no effect on the mortgage markets. The real story is in non-Government market players. This is particularly true in the pricier areas of NYC, where a lot of the lending is not fed through the Fannie/Freddie system. Yawn.
It’s like you just got a flat tire and you’re looking under the hood to see what’s wrong.
OK What…using your own cut and paste…
http://www.bloomberg.com/markets/rates/index.html
Page down to the Municipal Bonds…they are the only data points where you can see where rates have moved from one-week, one-month and six-months ago.
They are as good example as anything but ALL THE RATE QUOTES ARE DOWN OVER EACH AND EVRY ONE OF THOSE TIME PERIODS
Learn to read and interpret your own data correctly Asshat.
I guess I am the only one happy about this. And I’m the only one driving the stock market and the $ up today. It’s all my own doing, no one else in the world is happy. Asshat.
“Which interest rates are “going to the moon” What???? 30 Year treasuries which have been the most resilient have even moved from about 5.40% to 4.30% over the past 12 months……shorter rates are down even more.”
Investors are fleeing other asset classes and buying Treasuries. This action pushes rates down but, mortgage spreads have been rising for a while now. Plus is banks are offing CD’s at 5%, why do you think they will loan money at 6%? Banks are trying to shore up the balance sheet. Here Dave keep your eyes on this.
http://www.mortgagebankers.org/
http://www.bloomberg.com/markets/rates/index.html
“Mortgage rates are down about 35 basis points today.”
It will get very expensive to borrow money very soon and I think this “bail out” is setting up the crash..
I’m not going to argue with people today because you don’t understand the magnitude of this action. The balance sheet of the US government is trashed….
The What
Someday this war is gonna end..
BTW Dave you are the only one happy about this bail out. Maybe you get to keep your Hedge Fund job until the end of the year….
Snarkslope: Not sure what you mean. If Treasury has to perform on its guarantees, then it gets essentially all the equity interest in the companies. If they rebound, Treasury (i.e., taxpayers) reap the profits. If Treasury doesn’t have to perform (i.e., the companies right themselves), then the equity holders who have seen an 80% drop in the value of their shares reap the profits. In other words, if the losses end up socialized (i.e., funded by the taxpayers), any upside goes back to the taxpayers. If the losses are not socialized (i.e., the companies manage without federal funds), then the owners of the companies benefit. In the worst case, both equity (private) and taxpayers (public) take hits.
There’s nothing wrong with what was done today. Although it reeks of socialism, nationalism or whatever you want to call it it was a great example of capitalism at work. The shareholders always take the greatest risks. And they were the ones who got wiped out.
The only unfortunate thing for individuals is that some of the Fidelity, Capital, Wellington and other mutual fund companies have been buying Fannie & freddie shares for YOUR mutual funds. The analysts and fund managers there should be fired!!!!
LOOK ON YOUR STATEMENTS TO SEE IF YOUR MUTUAL FUND HAS BEEN ADDING TO FANNIE & FREDDIE…..and then call them!!!!
BTW Interest rates are going to the moon! OK What
Which interest rates are “going to the moon” What???? 30 Year treasuries which have been the most resilient have even moved from about 5.40% to 4.30% over the past 12 months……shorter rates are down even more.
Mortgage rates are down about 35 basis points today.
Where are you getting your facts? The usual place? Pulling them out of your ass???