But at the rate of federal cashburn, once the $10T (!) level is breached, then they can go to town.

They just don't have to breach it.

MiTurn writes:
Market rally tomorrow. To the moon. Crazy.

I think you're absolutely correct on this... We just phucked our kids (again) and the markets applaud. God damn Pigmen.

Great read from the ticker forum. Apologies it's long and don't have the link.

From Paul Gigot in the WSJ:

'Fan and Fred have been protected by an alliance of Capitol Hill and Wall Street...In late 2001, I got a tip that Fannie's derivatives accounting might be suspect. I asked Susan Lee to investigate, and the editorial she wrote in February 2002, "Fannie Mae Enron?", sent Fannie's shares down nearly 4% in a day. In retrospect, my only regret is the question mark.

Mr. Raines reacted with immediate fury, denouncing us in a letter to the editor as "glib, disingenuous, contorted, even irresponsible," and that was the subtle part. He turned up on CNBC to say, in essence, that we had made it all up because we didn't want poor people to own houses, while Freddie issued its own denunciation.

The companies also mobilized their Wall Street allies, who benefited both from promoting their shares and from selling their mortgage-backed securities, or MBSs. The latter is a beautiful racket, thanks to the previously implicit and now explicit government guarantee that the companies are too big to fail. The Street can hawk Fan and Fred MBSs as nearly as safe as Treasurys but with a higher yield. They make a bundle in fees.

At the time, Wall Street's Fannie apologists outdid themselves with their counterattack. One of the most slavish was Jonathan Gray, of Sanford C. Bernstein, who wrote to clients that the editorial was "unfounded and unsubstantiated" and "discredits the paper." My favorite point in his Feb. 20, 2002, Bernstein Research Call was this rebuttal to our point that "Taxpayers Are on The Hook: This is incorrect. The agencies' debt is not guaranteed by the U.S. Treasury or any agency of the Federal Government." Oops.

Mr. Gray's memo made its way to Wall Street Journal management via Michael Ellmann, a research analyst who had covered Dow Jones and was then at Grantham, Mayo, Van Otterloo & Co. "I think Gray is far more accurate than your editorial writer. Your subscribers deserve better," he wrote to one senior executive.

I also received several interventions from friends and even Dow Jones colleagues on behalf of the companies. But I was especially startled one day to find in my mail a personal letter from George Gould, an acquaintance about whom I'd written a favorable column when he was Treasury undersecretary for finance in 1988.

Mr. Gould's letter assailed our editorials and me in nasty personal terms, and I quickly discovered the root of his vitriol: Though his letter didn't say so, he had become a director of Freddie Mac. He was still on the board when Freddie's accounting lapses finally exploded into a scandal some months later.

The companies eased their assaults when they concluded we weren't about to stop, and in any case they soon had bigger problems. Freddie's accounting fiasco became public in 2003, while Fannie's accounting blew up in 2004. Mr. Raines was forced to resign, and a report by regulator James Lockhart discovered that Fannie had rigged its earnings in a way that allowed it to pay huge bonuses to Mr. Raines and other executives.

Such a debacle after so much denial would have sunk any normal financial company, but once again Fan and Fred could fall back on their political protection. In the wake of Freddie's implosion, Republican Rep. Cliff Stearns of Florida held one hearing on its accounting practices and scheduled more in early 2004.

He was soon told that not only could he hold no more hearings, but House Speaker Dennis Hastert was stripping his subcommittee of jurisdiction over Fan and Fred's accounting and giving it to Mike Oxley's Financial Services Committee. "It was because of all their lobbying work," explains Mr. Stearns today, in epic understatement. Mr. Oxley proceeded to let Barney Frank (D., Mass.), then in the minority, roll all over him and protect the companies from stronger regulatory oversight. Mr. Oxley, who has since retired, was the featured guest at no fewer than 19 Fannie-sponsored fund-raisers.

Or consider the experience of Wisconsin Rep. Paul Ryan, one of the GOP's bright young lights who decided in the 1990s that Fan and Fred needed more supervision. As he held town hall meetings in his district, he soon noticed a man in a well-tailored suit hanging out amid the John Deere caps and street clothes. Mr. Ryan was being stalked by a Fannie lobbyist monitoring his every word.

On another occasion, he was invited to a meeting with the Democratic mayor of Racine, which is in his district, though he wasn't sure why. When he arrived, Mr. Ryan discovered that both he and the mayor had been invited separately -- not by each other, but by a Fannie lobbyist who proceeded to tell them about the great things Fannie did for home ownership in Racine.

When none of that deterred Mr. Ryan, Fannie played rougher. It called every mortgage holder in his district, claiming (falsely) that Mr. Ryan wanted to raise the cost of their mortgage and asking if Fannie could tell the congressman to stop on their behalf. He received some 6,000 telegrams. When Mr. Ryan finally left Financial Services for a seat on Ways and Means, which doesn't oversee Fannie, he received a personal note from Mr. Raines congratulating him. "He meant good riddance," says Mr. Ryan.

Fan and Fred also couldn't prosper for as long as they have without the support of the political left, both in Congress and the intellectual class. This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. Krugman and the Washington Post's Steven Pearlstein in the press. Their claim is that the companies are essential for homeownership.

Yet as studies have shown, about half of the implicit taxpayer subsidy for Fan and Fred is pocketed by shareholders and management. According to the Federal Reserve, the half that goes to homeowners adds up to a mere seven basis points on mortgages. In return for this, Fannie was able to pay no fewer than 21 of its executives more than $1 million in 2002, and in 2003 Mr. Raines pocketed more than $20 million. Fannie's left-wing defenders are underwriters of crony capitalism, not affordable housing.

So here we are this week, with the House and Senate preparing to commit taxpayer money to save Fannie and Freddie. The implicit taxpayer guarantee that Messrs. Gray and Raines and so many others said didn't exist has become explicit. Taxpayers may end up having to inject capital into the companies, in addition to guaranteeing their debt.

The abiding lesson here is what happens when you combine private profit with government power. You create political monsters that are protected both by journalists on the left and pseudo-capitalists on Wall Street, by liberal Democrats and country-club Republicans. Even now, after all of their dishonesty and failure, Fannie and Freddie could emerge from this taxpayer rescue more powerful than ever. Campaigning to spare taxpayers from that result would represent genuine "change," not that either presidential candidate seems interested.

How many times does Barney Frank calls his ceditors to up his credit line?

ZERO!

Paulson says the $3.3 trillion covered-bond market... is a remedy

Paulson's solution to too much debt is more debt but with a cool-looking logo?

Gad, this is just madness....

Maybe this is the last time in my lifetime that Americans vote for another president from Texas.

George W. Bush
PRESIDENTIAL LIBRARY (Coming January, 2009)
Welcome to the future home of the officious Geroge W. Bush Presidential Library. This patriotic website will serve as an authoritative digital archive, dedicated to preserving and celebrating the godly legacy of the most honest, peaceful, and intelligent leader in the 6,000 year history of the planet Earth.
George W. Bush Presidential Library 

FFDIC,
I think many of us think perhaps it could be the last time Americans vote for a President.

Actually, that's not true, but 4 years ago not too many people were pessimistic about housing.

ades- "is it true? "

Yes, nades, it is true.

CR, be sure to wear your Lone Ranger mask.

"...the most honest, peaceful, and intelligent leader in the 6,000 year history of the planet Earth."

Conjure Bag says, "Whoa! BWAHAHAHAHAHAHAHAHAHAAHA!"

"BWAH, I can't stop!"

BWAHAHAHAHAAHA!

Just imagine what's coming to China where practicaly every single company is some sort of Fannie Mae. The Cultural Revolution is going to look like a day at the beach.
Anyway, welcome to the U.S. of Fuc@ing Mae!

"...and GPS systems"

Let me guess. So you can figure out how much ground you've covered in your wheel chair?

Banker, is that really you?

How's the Banker Dome holding up?

Got canned tuna and chocolate drink mix?

Banker, you get what you paid for! The end results are not going to be prety. "I am too poor to buy cheap things", comes to my mind.

mortgage bailout bill is 690 pages long!

Ahh, excellent.
They outsourced it to China.

Choosing Depression Style Cottages Over McMansions:
YouTube
- Choosing Cottages Over McMansions

you may get a move toward oil and gold out of this....and a move down in the dollar past the previous low.

From the sluts at Reuters:

Infrastructure could spur new stimulus: Rep

Yahoo! 404 - Page Not Found

The House is talking about spending big cash, err I mean debt, on new infrastructure projects. Too bad we're already broke.

WPA?

It all seems to be contained now. Paulson was right after all he just didn't know it at the time that he first lied to us. I can sleep tonight. Bless that man.

I planted a Yur-O tree next to the B. Bernanke buried bobble head. My landscape artist tells me it will start producing Yur-Os in the next season, due to the high level of helpful fertilizer BS bernanke spews.

Happy Pickens!

I want to see a Bernanke Bobblehead doll testify to Congress.

The Feds could sell tickets.

On Economy, Boozer Bush Faults 'Drunk' Wall Street

On Economy, Bush Faults 'Drunk' Wall Street - WSJ.com

Anyone wanna bet that we get a "strong dollar" speech tommorrow?

I know what I'd do if I had a Bernanke bobblehead.

I'd mix up some

"Eye of newt, and toe of frog,
Wool of bat, and tongue of dog,
Adder's fork, and blind-worm's sting,
Lizard's leg, and howlet's wing,--
For a charm of powerful trouble,
Like a hell-broth boil and bubble."

Burning in Hell is too good for these criminals.

Saw this yesterday, Anon. If you're going to quote the Imbecile, you should quote him verbatim,

"The question is, How long will it sober up and not try to do all these fancy financial instruments?"

because no matter how hard he tries, (presuming he actually does try,) he still can't utter an unflawed sentence.

..., Mr. Paulson said in his speech at the New York Public Library. "But I am playing the hand that I have been dealt."

He forgot to mention the part about how he just finished dealing the cards from a stacked deck while at Goldman Sachs.

Let's keep this party going!
http://thumbsnap.com/v/Gdkm9MXQ.jpg

Look at the thirties, it was the sell off in bonds that put a knife in it. Who cares about equities at this point, it's the bond market stupid. If the 10 year craps out with WB style earning, boy that'll put a page in these clowns history book.

Uncle Billy,
I'd like to know who's funding many people. Many times when I read something in the WSJ I wonder what's behind it. CNBC...at least they're obviously pumping stocks they own.
I'll take off my tinfoil eyeshade.

The more I read, the more I feel that one if not both GSEs should be put in runoff mode starting in 2010 with the Govt. providing bridge financing to get them through this rough patch(and taking a nice chunk of future revenues for that privilege.)

2 problems in 10 years shows that the mission of the GSEs is over. Let the FHA and VA do entry level financing and securitization take the rest. I don't think securitization was the problem per se, it was the mispricing of risk.

I thought Congress might at least drag their feet on this for awhile to give the impression that they actually care about our future. Wrong again.