Pimco's Gross: Treasury to Buy Fannie/Freddie Preferred by End of Quarter
Submitted by
CalculatedRisk on Wed, 08/06/2008 - 11:43am (69 comments)
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Yes, we will socialize all losses.
First
to own a GSE?
OK, maybe just a little piece. I'm in a low tax bracket.
And yet people are buying the common stock!
Puts are still available...
Then we can all own a bunch of useless jumbo loans on overvalued properties.
Wait until the high end foreclosures start. Nobody whines louder than the high end.
Bring it on, got my SKF and SRS baby.
Ugh. What a mess.
What is that phrase? Oh yeah...
"The road to Hell is paved with good intentions."
"The road to Hell is paved with good intentions."
I'm not sure that their intentions are even good.
the road to hell is paved with your tax dollars.
greased more like...
Question is now, who bails out the hemorraghing US government? Do we inflate our way out of debt, a la South America in the 80s?
That's the next big thing, iceman.
Even if Ambac stops writing new business it may return enough cash to shareholders to justify a $40 share price, said Lemonides, whose firm held 864,977 shares as of March...
Holy crap this guy is delirious...
Anyways I'll put shorts on that day our Comrades buy the preferred. Candy from a trust fund baby IMO. Until they raise 150 billion they are under capitalized. Does this add to the 25 billion cost Hank?
Just switched money from vanguard prime money market to the vanguard treasuries money market, yesterday...
What do you think the implications might be for treasury money markets, if any?? I thought that the treasury money market should be safer than the prime, but am not sure ????
It's really hard to know where to place cash right now????
Remind me which country we're talking about here?
Yes we do. Its our only option. Inflation is our salvation!
Invest in America, keep our country strong and free....Oh! Wait!
Questions: At what price will they buy? Will these be new shares issued or will they buy existing shares?
If I was a socialist I would buy shares from existing shareholders because I know these guys are just itching to sell and then I could theoretically put a floor under the price that day. Hank don't pay less than 150% of the value. Show them your bazooka in you pocket!
Not directly on topic, but also of interest.
Eurotribune blog European Tribune - Community, Politics & Progress.
comment to a thread about Greenspan suggests that Greenspan's dissertation was on housing bubbles.
'WE'VE FOUND IT -- A COPY OF ALAN Greenspan's long-lost Ph.D. thesis! Or, more accurately, a rare copy of the elusive document, in Lassie-Come-Home-fashion, found us.
The dissertation, written in 1977 when Greenspan received his coveted degree from New York University, had been tucked away on a professor's sagging bookshelf for 31 years.
"There is no perpetual motion machine which generates an ever-rising path for the prices of homes," wrote Greenspan in his dissertation.'
The commenter cites Barrons for this piece of history. I don't have online access. Confirmation anyone?
Remind me which country we're talking about here?
Belarus, right?
Bill Gross talks a lot.
O/T
FDIC August Report card
Only one made SN
The Oakwood State Bank P.O. BOX 38 OAKWOOD TX 75855-0000 SN
And three NIs
FDIC: Monthly List of Banks Examined for CRA Compliance
Swedish Chef - really?
TED spread pipped up to 1.16 from 1.07...just sayi
"Inflation is our salvation!"
Not exactly. The savior (secular) is the one who saves us from the chaos of inflation. A strong leader. Who might that be?
A strong leader = Stalin?
The strong leader is not to be confused with fuehrer prinzip...no?
The savior (secular) is the one who saves us from the chaos of inflation. A strong leader. Who might that be?
Zombie Gerald Ford, handing out WIN buttons?
Can C book this as a profit?
Aug. 6 (Bloomberg) -- Citigroup Inc. may be forced to buy back about $8 billion in auction-rate securities and fined as much as $100 million in a settlement with U.S. regulators over claims it improperly saddled customers with untradeable bonds, two people familiar with the case said
Dilution isn't just for Wall St any more.
Seriously, who buys shares now?
I can't wait to hear the next plan from Paulson on Sunday at 4pm ET.
The only good Bill Gross interview was the one where he likened the MBS to a hooker with a tramp stamp. That was entertaining.
He is right about one thing: long Govies and short Junk. It's all relative. If US government defaults a lot of corporate BK will have gone before. Making money is all about timing.
2-year notes now, RYJUX down the road ??
Barley
Check the link or go to European Tribune - Community, Politics & Progress. and read the thread about Greenspan.
This is not my personal knowledge, and I can't even confirm with Barrons right now. But interesting!
I do a fine impression of Mr. Gross; it's basically a Mickey Mouse voice with vulgarities directed to the hoi polloi (ho ho!).
It's really hard to know where to place cash right now????
The Treasury's buying preferred shares of a financial black hole is stealth monetization. Buy PMs.
Bill Gross can inside trade with impunity, apparently.
Has anybody asked or answered where the Treasury is going to get the money to buy the preferred?
Yay! Now Ive finally achieved the American Dream...I'm a homeowner! That it is a fractional time share of a place I'll never get to see makes no difference to me. I've got braggin rights! Social climbing here I come....Woot!!
It's now official, were in a recession..
Playboy shares fall as company swings to loss
Playboy shares fall as company swings to loss
link-
Playboy shares fall as company swings to loss - MarketWatch
"A strong leader = Stalin?"
A highly intelligent, self-educated, ruthless, amoral, paranoid sociopath? Again, who would that be?
Pavel,
Heh, heh - who could that be?
In the US, we've got the ruthless, amoral, paranoid sociopaths. That has to count for something.
Oh, that is funny! I didn't even think of it that way... yes, the once considered impossible dream of bringing homeownership to ALL Americans has been realized!!!
See why Amurica is such a great nation!
(Pay no attention to the "hatemongering leftists" and their claims that the original phrasing was more along the lines of "Americans owning their own home". They just want to control your life.)
A highly intelligent, self-educated, ruthless, amoral, paranoid sociopath? Again, who would that be?
Take out the self-educated and I would nominate either Dick Cheney or Jack Welsh.
Jim
"Has anybody asked or answered where the Treasury is going to get the money to buy the preferred?"awgee | 08.06.08 - 4:32 pm
I wonder if, before I die, I'll see corporate paper of JNJ, BRK or XOM with a higher credit rating than Gov't paper.
NC Jim writes:
A highly intelligent, self-educated, ruthless, amoral, paranoid sociopath? Again, who would that be?
Take out the self-educated and I would nominate either Dick Cheney or Jack Welsh.
Jim
NC Jim | 08.06.08 - 4:44 pm | #
Petraeus.
All the foreclosed homes that the government ends up with through all their bailouts should be converted into timeshares. They can then rent them out to collect all the money sunk. Hey, may be they should create a new GSE to run this whole thing.
Old OT, but related:
CNBC Video shows Meredith Whitney talking about how banks are recapitalizing by very little are being used for loans.
Bailout of F&F is F&F, and not for homeowners.
So Gross gets what he wanted and makes a tidy profit, paid for with taxpayer dollars.
DUH!
Yeah!!
Privatize the profits, socialize the losses!
I assume that all the various overpaid executives involved will have to give back their absurd bonuses to pay for this disaster, right? Right? Hello? Hahahaha - of course not!
Let us all praise our Dear Leaders and look forward to the day when our money has an expiration date printed on it since it is being printed so fast. Of course, even then, inflation will be "contained" and all that drek.
"So Gross gets what he wanted and makes a tidy profit, paid for with taxpayer dollars."
What is it exactly that Gross wants?
Barley writes:
O/T
FDIC August Report card
Only one made SN
The Oakwood State Bank P.O. BOX 38 OAKWOOD TX 75855-0000 SN...(snip)
Just a little gem from wikipedia:
"The Oakwood State Bank, operated by Roddy R. Wiley, Jr. (born ca. 1923), is called the smallest bank in the United States. It serves some six hundred accounts in the same manner that it did in the 1950s -- without the new banking conveniences of recent decades. Even account numbers are ignored, for the bank focuses on the customers' names."
"Do we inflate our way out of debt, a la South America in the 80s?"
I think so. The only three options I'm aware of are to tax, conquer or print.
This new aspect of GSE ownership will allow the government to send stimulus checks every quarter to taxpayers, like a dividend; this will be a good job for IRS!
Does anyone think this will raise mortgage rates?
FNM and FRE stock are levitating as if investors expect a bailout to salvage their investment in common stock.
Anybody care to comment on the likelihood of that being so?
In case you missed it, we are already attempting to inflate our way out of this problem. Think about it? Take a look at the FF rate vs inflation....BB cut the hell out of rates, inflation went nuts, our standard of living went to the crapper. Outside of gas prices, there isnt much chance any of the things we pay for in our typical HH budgets are going to go down in price, and at best, we might get a few years of low inflation after this mess. But our Standard or living has been permanently impaired. Of course, this matters most to the little people, ya know, the ones who cant afford to hire UBS to help them avoid taxes. So, yeh, more socialization of the costs, in as many ways as possible, all so that the great innovators who brought this upon us can continue to suck the blood from this country.
Born and bred dopes, that's us. Is this what we deserve, or are we just really unfortunate?
"FNM and FRE stock are levitating..."
Have you seen how they fared today?
FRE down more than 19%
FNM down almost 15%
wolf
LOL
Tomorrow's Headline: Oakwood State Bank assumes Citi Banks retail operations in an effort...
Don't worry about Fannie or Freddie since Paulson has made it clear they will get an unlimited amount of taxpayer dollars.
"Pavel,
Heh, heh - who could that be?
In the US, we've got the ruthless, amoral, paranoid sociopaths. That has to count for something."
There's no tradition in the US of the all-powerful, all-highest, omni-competent sacred Tsar-Caesar. Stalin was literally worshiped. No one would have dared even to submit for publication the editorial cartoons in the US press. There was a poet named Mandelshtam who wrote a verse that included a reference to Stalin's 'cockroach mustache', and that was his death sentence.
I once heard a high-ranking Soviet journalist talk about how Khrushchev was a crude, loud-mouthed bastard, 'but at least he didn't kill people.'
There has never been anyone remotely like Stalin in the American political class. There is real terror in the world. The US has been very sheltered from it.
What is it exactly that Gross wants?
gab
A smaller forehead?
And that helps him make a tidy profit? He must be a magician...
Then why are they still paying a dividend at all?
Re: There has never been anyone remotely like Stalin in the American political class. There is real terror in the world. The US has been very sheltered from it.
Pavel Chichikov | 08.06.08 - 5:48 pm | #
I fear that our long run of luck may end.
This is certainly the course we are on. Financial ruin...desperation...a promise of a better way forward...renewed pride....and mass slaughter.
And Pavel, I do hope you'll write a blog one day. Interesting views, dude.
Pavel, you are right of course. That is if you are talking about history.
We are headed into tough times. But I don't think that times are even remotely bad enough that would put up with a tyrant here in the U.S. And yet...
Jeez pavel, I'd you keep injecting reality into this discussion, the people might have to actually think. Newsflash kids: as screwed up as his country is, it's still impossibly free by any historical measure.
Cheers,
Prat
praetorian writes:
Jeez pavel, I'd you keep injecting reality into this discussion, the people might have to actually think. Newsflash kids: as screwed up as his country is, it's still impossibly free by any historical measure.
Cheers,
Prat
praetorian | 08.06.08 - 9:19 pm | #
I agree but not because we are so free but because there has been so little freedom in the past - by any historical measure.
But then what do you expect from a 'pack animal' - wolves would feel at home in many of our societies if they could walk on two legs.
Apologies for the typos of the previous post. That was an attempt to comment via an iPhone on caltrain.
Dryfly: sure, but that's just it. The (relative) radical freedom of America is a miracle and the notion that fascism's grim curtain is about to set over us is absurd. This is a nation filled to the brim with guns. With movies and TV shows hawking the US as bad guys or good guys being lead by bad guys or, occasionally, as just plain good guys. With unbridled internet communication. With multiple shows dedicated to mocking our elected leader. With Las Vegas, Salt Lake City, Boston and Birmingham. With The Nation, The Atlantic, The Standard and The New Criterion.
There's a lot going wrong right now, and I'm as pissed as everyone else about it, but creeping fascism ain't on the list.
Cheers,
prat