Fannie and Freddie Press Conference Videos
Submitted by
CalculatedRisk on Sun, 09/07/2008 - 7:18pm (212 comments)
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Housing is non-GDP producing, and capital should not be wasted on it.
Our economy depends on it!?
Talking heads.
All, It's hard to believe Fannie Mae raised $7.4 billion in May.
Essentially gone ... from the SEC:
On May 8, 2008, Fannie Mae (formally known as the Federal National Mortgage Association) agreed to sell 94,300,000 shares of its common stock and 51,750,000 shares of 8.75% Non-Cumulative Mandatory Convertible Preferred Stock, Series 2008-1 (the Series 2008-1 Preferred Stock) in two separate offerings. The common stock was sold through a syndicate of underwriters led by Lehman Brothers Inc., J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. The Series 2008-1 Preferred Stock was sold through a syndicate of underwriters led by J.P. Morgan Securities Inc., Lehman Brothers Inc. and Banc of America Securities LLC.
The initial public offering price for the common stock was $27.50 per share, with the aggregate total proceeds to Fannie Mae for the offering of common stock (after application of the underwriting discount of $0.6875 per share or $64,831,250 in total, and exclusive of the expenses of the offering and any advisory fees) being $2,528,418,750. The initial public offering price for the Series 2008-1 Preferred Stock was $50 per share, with the aggregate total proceeds to Fannie Mae for the offering of the Series 2008-1 Preferred Stock (after application of the underwriting discount of $1.25 per share or $64,687,500 in total, and exclusive of the expenses of the offering and any advisory fees) being $2,522,812,500.
Wow. That has to hurt.
Best to all.
They are so focussed on reading exactly what's in front of them.
I think there should be a South Park parity.
Elvis - Parody
"Wow. That has to hurt."
It didn't even make it four months.
Foresight, that's what it is. Foresight.
Lets say this F&F bailout cost us $300B, that is about $3000 per each US households.
We all know very well that (in my opinion) at least 40%-50% of US house holds are NPTP (No Pot to Piss In), so where the money will come from?
I think we will become Weimer republic and out of it we will see dictatorship merging. Sad, very sad.
Ahh, but they needed 100 billion. . .
CR,
Thanks for remaining at the helm thru this... (in some sick disturbed way) I'm loving watching this unfold...
Cheers!
~n
........
so fannie mae and freddie mac have gone bernie mac
In reality the problem is passed on to the next Congress and Administration.
But let's not mistake this for what it is - a nice bailout for Wall Street. They can repackage all their toxic waste as new MBS that can then be guaranteed by Fanron and purchased by the Treasury. The middle class is now going to be stuck with all the crapola on the books of every bank and broker/dealer. Just watch Fanron's balance sheet balloon. The deal for this charade to work must be that the Chinese, Japanese and Arabs and the PIMCOs of the world will not trash the Treasury market while they make off as bandits at the expense of working class Americans.
Weimar is right.
The Russians have had their collapse, now it is our turn. When we have brought home all our troops, closed all of those foreign bases, stopped all foreign aid, and started to deal with the remains of our financial system, then the end will be insight for this one.
Hank looks like R. Duvall in A.N.,
but he sure doesn't sound like him.
Someday this war's gonna end...
You don't need a doctorate in economics to figure out that there is gross incompetence and dereliction of duty here.
When a government sponsored entity issues $7.4 billion in equity that becomes worthless four months later, that should tell you that everyone involved is, at best, incompetent.
If it doesn't tell you that, you should be asking yourself about your own competence.
Few Stand to Gain on This Bailout, and Many Lose
Few Stand to Gain on This Bailout, and Many Lose - NY Times
from the above link...
"Daniel Mudd, of Fannie Mae and Richard Syron of Freddie Mac are in line to collect millions in severance payments. "
. . . but at least we finally know what the top of Paulson's head looks like.
So, they are going to re-inflate the housing bubble? Or try to?
As a public service I shall provide the following synopsis:
"Three card Monty got us into this, three card Monty will get us out."
"Daniel Mudd, of Fannie Mae and Richard Syron of Freddie Mac are in line to collect millions in severance payments. "
Wouldn't expect any less out of a banana republic.
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
YouTube -
The largest bailout in world history is being ignored by Canadian news outlets.
Being a socialist country, we canuks have been backing MBS for years now.
Jeez, if ARS is getting kicked back to the street, what about this ($1.25 per share or $64,687,500)
why don't they fork that back to the treasury for selling shite product.
Thanks for the OT CR.
mp writes:
You don't need a doctorate in economics to figure out that there is gross incompetence and dereliction of duty here.
When a government sponsored entity issues $7.4 billion in equity that becomes worthless four months later, that should tell you that everyone involved is, at best, incompetent.
If it doesn't tell you that, you should be asking yourself about your own competence.
Jas = mp????
j.k.
..........
man this sucks =[
ice sunset tonight...keeps me sane in insane times.
Hey, they did'nt announce this on expiration friday.
that's a positive.
"Jas = mp????"
Nades, please.
Buck up Yankees.
It's not that bad.
So many of you wanted to escape to Canada. Now you get a taste of socialism.
Our quality of life is pretty good here... even with 100% free health-care and 100% government backed mortgages.
Just start saying "eh" after every sentence and the transformation is complete.
if you start them all together, their actions finally become clear - they don't make sense.
Bear Stearn cost: $30B
F & F cost: $300B (at the minimum)
it does not look like a progress to me.
what is next ?
call the fin's
BAC-36
JPM-42.75
GS-175
MER-29.5
MS-44
WM-5
WB-18
C-22
well asian markets are up; gentleman, let's postpone the treatment and load our patient with painkillers.
Rally, rally, rally : now all stand in line to buy value, or...
"what is next ?"
What? What! You don't know?
Use your imagination.
mp writes:
"Jas = mp????"
Nades, please.
......
CR, here's a question for you.
Since every man, woman and child in the US has been obligated for about $3,000 so far, shouldn't there have been a vote in Congress over this?
I can't believe the banking committee holds that kind of power on their own.
I am a US citizen but not a born-and-bred one.
Jas, you spend most of your comments badmouthing the US and you're not even a natural-born American citizen? Are you kidding me? You're an immigrant?
From what planet?
Re: All, It's hard to believe Fannie Mae raised $7.4 billion in May.
Backdated option grants, payoffs, bribes and all the usual suspects!
"Since every man, woman and child in the US has been obligated for about $3,000 so far, shouldn't there have been a vote in Congress over this?"
Not in a banana republic, I think we made the transition about 2 market stick saves ago.
"CR, here's a question for you.
Since every man, woman and child in the US has been obligated for about $3,000 so far, shouldn't there have been a vote in Congress over this?"
$30K;
in the first couple of minutes of the video they mention that congress gave treasury dep. some spacial mandate (superman powers), aka blank mandate to do whatever they wish if they must.
Re: gross incompetence and dereliction of duty here.
"...congress gave treasury dep. some spacial mandate (superman powers),"
Congressional cop-out.
Welcome, oligarchy.
I find it amusing that the only real free market left in this world is.... China. Today it is ignoring the rest of the world and down about 1% already.
000001.SS: Summary for SSE Composite Index- Yahoo! Finance
It was a cop-out, just like Viet Nam.
And just like Iraq and Afghanistan.
With Shanghai outside the global crooks purview, it appears theirs is the appropriate response. -1.5%
While the rest of the interwoven criminal matrix of eastern bourses are up between 3-6%
I really hate having to trade against a corrupt government who is leaking inside manipulation information only to their protected and preselected winners.
Yes, Congress passed legislation to enable Paulson to do this, back in July. In the House, the bill (H.R. 3221), was passed 272-152 and here
is the roll call vote. The Senate passed it, too, by the margin of 72-13, and the roll-call is here. Neither McCain nor Obama voted on it.
Somebody asked upthread if they are trying to reignite the bubble with this plan. Well, Paulson finally says out loud that as goes housing, so goes the economy. Houses are still too expensive for most people to afford, so yeah, they are definitely trying to fire it up again. Housing prices decreasing to a long term mean multiple of wages from the bubble peak is what is and has always been fundamentally responsible for any systemic risk in the financial world since the credit crisis started. They gotta nip that shizzle in the bud right now. And all you faceless nobodys out there are gonna pay for it, and pay for it, and keep on paying for it.
And there's not a goddamn thing you can do about it.
"Neither McCain nor Obama voted on it."
Surprise, surprise.
They both know it's a third rail. I hope it ends up electrocuting both of them.
OT:
Daily Show
I like this from over at nakedcapitalism:
The seizure appears to have been triggered by a hedge fund attack on the shares of the GSEs which began to collapse broadly in after hours trading on Friday night; Fannie Mae plunging over 25% and Freddie Mac down in excess of 15%. In both cases, the bottom simply dropped out, and rather then have both shares prices collapse in very public fashion (likely even further) on Monday, the government simply moved in and seized the companies.
El Cliffo writes:
"Jas, you spend most of your comments badmouthing the US and you're not even a natural-born American citizen? Are you kidding me? You're an immigrant?"
You can be anything you want on the intertubes.
I will bet that some hedge fund on the wrong side of a F/F credit default swap goes bell-up, and the Fed gets it's crisis anyway.
I hate the bailout as much as anyone else, but I think the figures of what it costs/US inhabitant is wrong. By my math the exact cost of the GSE bailout seems to be $1K for every man, woman, child in the US.
5% haircut of a total portfolio of 6T = 300B.
US population is 300M, so cost per inhabitant = 300B/300M or $1000.
"Over $400 billion in bank- and finance-related capital has been raised during the past year, a decent amount of it, by the way, having been bought by yours truly and my associates at PIMCO. Too bad for us and for everyone else who bought too soon. There are few of these deals now priced at par or above, which is bondspeak for "they are all underwater." We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments."
The loose use of the term "banana republic" by many of you morons does nothing more than substantially reduce the estimated average IQ of these boards. Yes, the U.S. is like Nicaragua...fkn morons. Move to Nicaragau or Guatemala and see how easy it is to sit around in you air conditioned house and post on internet blogs. Spoiled fkrs.
Banana republic is a pejorative term for a small country that is politically unstable, dependent on limited agriculture (e.g., bananas), and ruled by a small, self-elected, wealthy and corrupt clique.[1] It is most commonly used for countries in Central America such as El Salvador, Belize, Nicaragua, Honduras, and Guatemala.
Gross, who said Treasuries were overvalued'' in a July 21 interview because their yields were too low, still prefers agency debt. Even so, he called for the U.S. government to start using more of its money to support markets to stem a burgeoningfinancial tsunami'' in a commentary posted on Newport Beach, California-based Pimco's Web site on Sept. 4.
Jackson still finds Treasuries too expensive. Ten-year notes yield 1.8 percentage points less than the inflation rate, the lowest so-called real yield since 1980.
There's a growing consensus the economy's gotten weaker,'' said First Pacific's Atteberry. That said,yields are still too low'' to buy Treasuries. Government debt has gained because ``people are still fearful of problems in the financial system and that's given them a flight to quality.''
Insurance Policy
Traders' expectations for inflation over the next decade fell to a five-year low last week, yields on Treasury Inflation Protected Securities show. TIPS due in 10 years yielded 1.97 percentage points less than notes of similar maturity, the smallest gap since 2003. The difference reflects the average inflation rate expected over the life of the securities. Oil fell to a five-month low of $105.13 on Sept. 5 on speculation slowing growth will curb demand.
Treasuries Beating U.S. Assets Vindicate Bernanke (Update3) - Bloomberg.com
I have a question. If these entities bonds are now explicitly backed by US taxpayers, why would anybody buy treasuries anymore?
Re: Spoiled fkrs.
Go beat your squirrel
And if the answer to my previous question is, nobody, how is your country going to finance itself?
So a question for the board - and I already know what my answer is - we've got cash set aside for some basement remodeling (no granite, thank you) and the project will be done cash - no loans.
Bought house expecting that to be done.
I anticipate living here for years to come. Done with moving.
Go ahead and do it or kill the project?
Anonymous:
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
You don't know me from the wind
You never will, you never did
I'm the little Jew who wrote the bible
I've seen nations rise and fall
I've heard their stories, heard them all
But love's the only engine of survival.
Your servant here, he has been told
To say it clear, to say it cold
It's over, it ain't going any further.
And now the wheels of heaven stop
You feel the devil's riding crop
Get ready for the future
It is murder.
The coke just gets better every time you snork...at some point this too will end!..
Sept. 8 (Bloomberg) -- Asian stocks surged the most in eight months and U.S. futures jumped after the U.S. government seized control of Fannie Mae and Freddie Mac, shoring up global financial markets reeling from more than $500 billion in credit losses.
Regarding the $5B in new FNM stock issued in early May. I'm not offering any excuses, but if you look at the FNM stock chart around that time, it looks like they were leveling off. So maybe it was thought FNM would recover. I remember Karen Finerman of "Fast Money", around June said she had purchased FNM at about $22 /share. So a lot of smart people were wrong.
I noticed that the Wall street boyz collect fees of about $129M for their "work" on the stock issue.
Beat your squirrel? I think that confirms my statement about the average IQ of this board. You can still work on your GED, you know?
"Go ahead and do it or kill the project?"
Damn the torpedoes! Full speed ahead!
Sallie must be the ugly step sister that didn't get invited to the ball.
Perhaps she will just head down to the corner bar and have a drink with Ginnie.
"Go ahead and do it or kill the project?"
Wait a few months unempoyment will surpass 7%. Lots of skilled folks begging for work.
They are still searching for the gun that was held to investors' heads to make them purchase the additional equity in May.....I don't think they will find it.
mp:
My sentiments.
Stewed on it today after reading specs.
Now just have to work some of that deflationary magic on the contractor.
And, no capes!!!!!!!!!
"I remember Karen Finerman of "Fast Money",..."
See, I don't watch or read things like "Fast Money." I object to the term.
CNBC? Bah! Cramer? Fool!
I guess I'm an old-fashioned guy.
@homedad
Contractor? Why the hell do you need a contractor? If you have children over the age of 9, they can use a hammer.
Go ahead and do it or kill the project?
homedad43 | Homepage | 09.08.08 - 12:20 am | #
Go for it...
Don't write off the granite though - prices are cheap now. Hell - I think it was Rob Dawg said he bought some & used it in his garage work shop - stuff's like a poor mans flat plate. Unbelievably good work surface for assembly & such.
UnAmericans,
You have to realize there are a lot of drama queens on here.
Go ahead and do it or kill the project?
Go ahead, but as others have noted, labor will get cheaper with time. As is, building materials are already much more reasonable.
It sounds like you're doing ok and financially stable. The questions only you can answer are:
1. What 'value to you' does this project bring? If the cost/benifit is strong, do it!
Got Popcorn?
Neil
Oil Production
Ike is forecast to enter the Gulf of Mexico, home to more than a quarter of U.S. oil production, by midweek. Computer models show it reaching the Gulf's center by the end of the week, heading south of Louisiana and moving toward Texas.
Energy producers reported that personnel from 10 rigs and 202 production platforms have been evacuated, the Minerals Management Service said today on its Web site. There are about 717 manned production platforms in the Gulf of Mexico.
Most energy output in the Gulf has been halted since Hurricane Gustav ripped through the area and made landfall in Louisiana on Sept. 1.
Crashcadia writes:
Sallie must be the ugly step sister that didn't get invited to the ball.
Perhaps she will just head down to the corner bar and have a drink with Ginnie.
Crashcadia | 09.08.08 - 12:24 am | #
Wait my pretties. Their time will come - once UE shoots up and college loans look about as rock solid as Alt A in the OC.
homedad43,
You have to do what's right for you. None of the drama queens on here can give advice.
"None of the drama queens on here can give advice."
Wrong. Every damn one of them can give advice but that doesn't necessarily mean it's what would be in his best interest.
Re: that confirms my statement about the average IQ of this board
Q: Do you always verify the fact that you are a retard?
"Wrong. Every damn one of them can give advice but that doesn't necessarily mean it's what would be in his best interest."
Ok, you're right ignore the advice of drama queens.
That's great, it starts with an earthquake,
birds and snakes, an aeroplane - Lenny Bruce is not afraid.
Eye of a hurricane, listen to yourself churn -
world serves its own needs,
Don't misserve your own needs.
Feed it off an aux speak, grunt no, strength no.
Latter starts to clatter with fear fight, down height.
Wire in a fire, representing seven games in a government for hire and a combat site.
Left of west, was a coming in a hurry with the furies breathing down your neck.
Team by team reporters baffled, trumped, tethered, cropped.
Look at that low playing! Fine then.
Uh oh, overflow, population, common food, but it'll do.
Save yourself, serve yourself.
World serves its own needs, listen to your heart bleed.
Tell me with the rapture and the reverent in the right - right.
You vitriolic, patriotic, slam, fight, bright light, feeling pretty psyched.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
Six o'clock - TV hour. Don't get caught in Foreign towers.
Slash and burn, return, listen to yourself churn.
Lock him in uniform and book burning, blood running.
Every motive escalate. Automotive incinerate.
Light a candle, light a votive. Step down, step down.
Watch a heel crush, crush.
Uh oh, this means no fear - cavalier. Renegade and steer clear!
A tournament, a tournament, a tournament of lies.
Offer me solutions, offer me alternatives and I decline.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
(It's Time I had some time alone)
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
(It's Time I had some time alone)
The other night I tripped the lights continental drift divide.
Mount St. Edelite. Leonard Bernstein.
Leonid Breshnev, Lenny Bruce and Lester Banks.
Birthday party, cheesecake, jelly bean, boom!
You symbiotic, patriotic, slam, book,neck, right? Right.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine...fine...
Most of the so called drama queens on this board called the F and F outcome correctly.
Can't say that about the MSM or BB.
On a somewhat related note to homedads' predicament.
I work for a commerical contractor in San Diego. Subcontractors prices are still contracting. Even with the union providing a floor to labor prices, unit prices are still shrinking.
Only three that arent are M/P, Elec & Steel. (Commodities are still wreaking havoc on them)
That all being said homedad, Do what you think is right, these markets are odd/volatile....
.......
I enjoy forums like this because people can say what they think and believe anonymously without fear of consequences.
Thanks folks.
Considered having kids help and we're going to do some of the work...specifically flooring, painting and lighting. Since this is also a guest room for inlaws (future suite?), has to look a bit better than the typical rec room, like I did w/my dad 35 years ago.
Also going to split the project into two segments and do over slightly longer period so as to not wipe out the cash. We can replenish and move on.
I'm operating under assumption that won't be able to get a heloc. Professional sister and dentist hubby got turned down outright three months for money to purchase duplex in Smokies.
Why do that anyway if wanting to show kids that the old way - borrow and payback - is likely the way of the dodo?
Interesting conversations these past several months/weeks.
Thanks and good night.
Ike is forecast to enter the Gulf of Mexico, home to more than a quarter of U.S. oil production, by midweek. Computer models show it reaching the Gulf's center by the end of the week, heading south of Louisiana and moving toward Texas.
You think its going to survive traveling down the middle of Cuba? They say it will re-intensify to Cat 3 - I wouldn't be surprised to see it struggle to make Cat 2 after that run. Plus is a Cat 3 even that big of a deal to oil infrastructure today? I thought just about everything out there was 'Cat 3 Approved'.
It will cause damage & heart ache (especially in Cuba)... more woes for property insurers. Shouldn't be the EOW for oil patch unless Cat 4+ going right through the rigs & platforms and up the ship canal. Doesn't look likely from an intensity perspective.
Outrageous Severance Deals For Fannie/Freddie CEOs--Paid For By You
Outrageous Severance Deals For Fannie/Freddie CEOs--Paid For By You
Specifically, Dan Mudd, the CEO of Fannie Mae, is getting $9.3 million of severance for destroying his company. Richard Syron, the CEO of Freddie Mac, is getting $14.1 million--in part because of a clause he added to his employment contract two months ago, when it was clear the company was headed for disaster.
Crashcadia writes:
Most of the so called drama queens on this board called the F and F outcome correctly.
And we've gotten used to the REIC trolls insulting us. Yet the predictions of this group tend to turn out correct again and again.
Next year will be interesting. We'll really get into the credit crunch. What we've seen to date has been nothing. But the Fall/Winter is when financial house cleaning usually occurs. House price drops are accelerating too.
100+ banks are expected to fail over the next 12 months. I'm thinking that we'll have a lot more trolls in 2009.
Got Popcorn?
Neil
Housing is non-GDP producing, and capital should not be wasted on it.
first comment is a winner!
Specifically, housing CONSTRUCTION is actual GDP, but the GROUND RENTS we pay are not GDP-related at all -- title to land is simply the privilege of excluding others from using that land without your permission. Paying for privileges IS NOT GDP.
Protect kids from American Mold.
FORCE them to be healthy, educated, and ethical.
Is there something more important ?
.
As a member of this drama club, I take offense to the fucking slur that there are "drama queens" here, that is total bullshit!!!!!
Ok, back to the show: FIN 46
Fannie Mae has also created an accounting policy related to its MBS pool activities, which appears to have as a primary purpose the avoidance of consolidation under FASB Interpretation No. 46, "Consolidation of Variable Interest Entities," also known as FIN 46. OFHEO believes that in this area, the Enterprise has not complied with FIN 46. As part of its policy, Fannie Mae transferred securities between SFAS 115 categories, yet did not provide the required documentation to describe the rationale for the transfers.
Fannie Mae engages in purchases of loans and offerings of MBS. In certain instances, the Enterprise obtains 100 percent of the MBS issued in an offering. In addition, Fannie Mae may end up owning 100 percent of a particular MBS through purchases in the secondary market. Fannie Mae states that it uses Qualified Special Purpose Entities (QSPEs) to issue these MBS. QSPEs are exempt from FIN 46 consolidation unless the company has the unilateral ability to liquidate or change the QSPE.
In February 2003, Fannie Mae adopted an accounting policy that defined a unilateral ability to liquidate as equivalent to owning 100 percent of a pool. This policy allowed the company to improperly avoid consolidation in three ways. The first was to effect a transfer of wholly-owned pools of securities from AFS to HTM; second, sell one percent of the wholly-owned pool to a third party; and third, create "mega pools," the collateral of which was comprised of multiple wholly-owned pools. The Enterprise took this step so that the sale of one percent of a "mega pool" would render the consolidation issue moot.
The page cannot be displayed
I enjoy forums like this because people can say what they think and believe anonymously without fear of consequences.
Anyone who thinks that "the authorities" gives a rats ass about what is said in a forum like this (or any other forum) has one of two problems
(1) He's wearing a tin foil hat about three sizes too big, or
(2) He has a greatly inflated opinion of his importance in the scheme of things
Or maybe both of the above.
FYI: As guarantor of our Fannie Mae MBS issuances, we recognize at inception a non-contingent liability for the fair value of our obligation to stand ready to perform over the term of the guaranty as a component of Guaranty obligations in our condensed consolidated balance sheets. Prior to January 1, 2008, we measured the fair value of the guaranty obligations that we recorded when we issued Fannie Mae MBS based on market information obtained from spot transaction prices. In the absence of spot transaction data, which continues to be the case for the substantial majority of our guarantees, we used internal models to estimate the fair value of our guaranty obligations. We reviewed the reasonableness of the results of our models by comparing those results with available market information. Key inputs and assumptions used in our models included the amount of compensation required to cover estimated default costs, including estimated unrecoverable principal and interest that we expected to incur over the life of the underlying mortgage loans backing our Fannie Mae MBS, estimated foreclosure-related costs, estimated administrative and other costs related to our guaranty, and an estimated market risk premium, or profit, that a market participant of similar credit standing would require to assume the obligation. If our modeled estimate of the fair value of the guaranty obligation was more or less than the fair value of the total compensation received, we recognized a loss or recorded deferred profit, respectively, at inception of the guaranty contract.
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE - 10-Q - 20080808 - FINANCIAL_STATEMENTS
Engineer Jim, I am not referring to the authorities.
Thread music: (1970)
Raindrops Keep Falling On My Head
by: B.J. Thomas
YouTube -
I just checked my local MLS listings. House prices are not going up yet. Plan not working.
dryfly this daily show was meant for you:
Starts with
It's the final day from St. Paul, Minnesota: where everything tastes better on a stick.
Wierdest City
Ok a few things in no particular (read: rambling) order:
Um, do you have any idea how hard it is to sell crap? Why do you think they got paid so much to do so?
Bloomberg - U.S. Takeover of Fannie, Freddie Offers `Stopgap' for Mortgages
Some of this is a stopgap to try to prevent the mortgage market from falling apart,'' former Federal Reserve Bank of St. Louis President William Poole said on Bloomberg Radio. The federally chartered, shareholder-owned structure, with risks covered by taxpayers, isan unacceptable situation,'' he said, projecting the Treasury may need to cover as much as $300 billion of losses."
The new Congress and the next administration must decide what role government in general, and these entities in particular, should play in the housing market,'' Paulson said yesterday in Washington. There is a consensus now thatthey cannot continue in their current form,'' he added."
This is not a permanent solution -- they've not saved Fannie and Freddie, what they've done is they've bought 15 months,'' said Bill Ackman, founder of Pershing Square Capital Management in New York, which has sold short the two companies, or bet on declines in their securities.It's a band aid. They haven't permanently recapitalized the companies.''
Paulson has threaded the needle just right by taking necessary action to stabilize U.S. financial markets while minimizing the liability for taxpayers,'' Schumer of New York, who heads the congressional Joint Economic Committee, said in a statement.This plan will be met with broad acceptance in Congress because it doesn't prejudge the ultimate fate of Fannie Mae and Freddie Mac.''
(Yeah Mr. Paulson now go help Sheila.)
U.S. Takeover of Fannie, Freddie Offers `Stopgap' (Update2) - Bloomberg.com
wht does this mean?
Re: Unpaid principal balance of: mortgage loans held in our mortgage portfolio; Fannie Mae MBS (whether held in our mortgage portfolio or held by third parties); and other credit enhancements that we provide on mortgage assets. Excludes non-Fannie Mae mortgage-related securities held in our investment portfolio for which we do not provide a guaranty. The principal balance of resecuritized Fannie Mae MBS is included only once in the reported amount.
Re: Guaranty book of business (12)
Fannie Mae MBS held by third parties (10)
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE - 10-Q - 20080808 - PART_I
reign: YouTube - The Who - Love Reign O'er Me
I like this from over at nakedcapitalism:
The seizure appears to have been triggered by a hedge fund attack on the shares of the GSEs which began to collapse broadly in after hours trading on Friday night; Fannie Mae plunging over 25% and Freddie Mac down in excess of 15%. In both cases, the bottom simply dropped out, and rather then have both shares prices collapse in very public fashion (likely even further) on Monday, the government simply moved in and seized the companies.
Anonymous
I can't imagine Yves would have said that, and I just did a search and there's nothing there, so you must mean its in a comment on that site.
Its also untrue. I was watching the AH action on Fri. First, came the news of the WSJ report about a things brewing on FRE, FNM, then first the stocks went UP, say 10%, SPY, DDM went up.. as more news/rumors came out, FNM FRE started to drop back and went -ve. I didn't watch the rest of the action as I was too busy closing a few short positions myself :-); seemed the right to do, even with the AH spread and seems like I was right, so far.
Anyway, news first, FRM, FRE dump later - that's the sequence of events.
-K
FT (required reading tonite)
Government lies and squishy ethics
FT.com / FTfm / Columnists - Government lies and squishy ethics
Paulson has threaded the needle just right by taking necessary action to stabilize U.S. financial markets while minimizing the liability for taxpayers,'' Schumer of New York, who heads the congressional Joint Economic Committee, said in a statement.This plan will be met with broad acceptance in Congress because it doesn't prejudge the ultimate fate of Fannie Mae and Freddie Mac.''
Yeah see, it's a Goldilocks plan -- just right
``Paulson has threaded the needle just right by taking necessary action to stabilize U.S. financial markets while minimizing the liability for taxpayers,''
http://www.weblinks247.com/indexes/idx24_usd_en_2.gif
Bloomberg.com:
Government Bonds
Bloomberg.com:
Commodity Futures
Uh-Huh
@FFDIC
"If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie.. for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State."
Joseph Goebbels
Jesse's Café Américain: Search results for goebbels
By the way, Jesse's Cafe Americain has got an interesting take on today's offering. Check it out if you have a chance.
Good NYTimes follow-up piece on Downey
Risky Loans Hurt Lender In California - NY Times
Fidelity, Wellington Lose After Loading Up on Fannie, Freddie
Fidelity, Wellington Lose After Fannie, Freddie Drop (Update2) - Bloomberg.com
`This is a disaster for anyone who bought the stock,'' said Jack Ablin, who helps manage $65 billion as chief investment officer at Harris Private Bank in Chicago. ``Based on what we know so far it seems like the stock is worth virtually nothing.''
Anchors on Squawk Box Europe just said Cititgroup has now downgraded FNM from a "buy" to a "sell".
Then they made fun of the analyst.
EngineerJim writes:
Paulson has threaded the needle just right by taking necessary action to stabilize U.S. financial markets while minimizing the liability for taxpayers,'' Schumer of New York, who heads the congressional Joint Economic Committee, said in a statement.This plan will be met with broad acceptance in Congress because it doesn't prejudge the ultimate fate of Fannie Mae and Freddie Mac.''
The last time Schumer spoke up something big collapsed.
NYSE halts pre-market trading in Fannie Mae, Freddie Mac
i'm just glad that i promised myself i wouldn't short until spx 1330 a few weeks ago...
spx 1292 will be interesting in any case this week, if we get there.
Don't have the stomach for the videos.
Fun reading here, but why is it that all the accountants, auditors, and characters involved, like Lockhardt, Paulson, etc, had no clue as to what was going on here? If they were being lied to, then there is a matter of fraud here being swept under the rug, while bonuses are being handed out to crooks, so whats up with fraud??
Investor Relations: Monthly Summary > Glossary
Total Book of Business. Sum of the Gross Mortgage Portfolio balance and Total Fannie Mae MBS and Other Guarantees balance, less Fannie Mae MBS held in the mortgage portfolio.
New Business Acquisitions. Sum of MBS issuances and Mortgage Portfolio purchases less Fannie Mae MBS purchases and securitizations of mortgage loans previously held in portfolio.
"Fidelity, Wellington Lose After Loading Up on Fannie, Freddie "
Charles Lemonides, CIO of ValueWorks, also loaded up on Fannie and Freddie.
In fact, you can still view Lemonides' Friday Bloomberg interview on the front page of Bloomberg.com under "Portfolio Matters" near the bottom of the home page.
He's had his head handed to him. On TV, no less.
"I predict preferred shareholders, regular shareholder and subordinated debt will be allowed to have stakes in the future as the implications to the FDIC and the credit default swap markets are unknowable and they dont want to find out the answers."
-Sept 5, 2008
This is all very interesting because, about a week ago I think, the Financial Times had an article by one of their columnists encouraging the purchase of Fannie preferred. The argument was that, in the event of a takeover, they'd keep the preferred because so many banks hold it. Yves Smith talked about it.
I think the guy's name is Dizzard, something like that. Anyway, he's had his head handed to him as well.
@Mo
Was that Lemonides you're quoting?
Paulson is a communist. He is in charge, he takes your money and gives it to his Wall Street Friends.
When no one can afford a loaf of bread and Paulson is living in his Chalet, maybe you people will wake up.
From the Big Picture:
It is amazing how many people have missed why the market has rallied. Right now, spreads are about 2% higher on mortgage debt than t bills. They should be even now that both have the full faith of the goverment behind them.
Unlike t bills though where the government pays out money, they get money with mortgage debt. So that debt is much like a bank loan, which is an asset.
So what happens to the value of a bond selling for $100 that yields 6% if its yield drops to 4%? The value goes to $150, a 50% increase.
If the value of the Fannie and Freddie debt goes up by 50%, the U.S. could see a huge increase in value of said mortgages from asset appreciation. I previously wrote how I thought losses amounted to only $30 billion. That number may pale in comparison to the gains we will see.
In addition, Fannie and Freddie were cash making machines prior to the last few years. Their gains were private, and their losses were public. Now, their gains are public as they should have been all along.
This "bailout" is anything but. It is more like theft. Anyone holding Fannie and Freddie mortgage debt is going to make out like a bandit.
Comments?
@Jim
It's possible but, if we're going to do that, why not do it with car loans as well?
For me, the moral hazard problem is the issue. We're going to re-visit this again and again over the coming months.
At some point, Uncle Sam is going to pull the tit away and Mr. Market isn't going to be very happy. Then what?
"Anyone holding Fannie and Freddie mortgage debt is going to make out like a bandit."
I was thinking the same thing, doesn't the value of Frannie's portfolio immediately increase? Part of their losses the past quarter were mark-to-market losses as spreads widened on their retained MBS, sort of a vicious cycle. But lower spreads should lead to mark-to-market gains...
that bazooka is aimed at you
Man, the 10 year is getting crushed. Bond traders and FNM preferred shareholders will be carrying pitchforks to DC tomorrow.
Anyone holding Fannie and Freddie mortgage debt is going to make out like a bandit.
Bloomberg.com:
Government Bonds
But anyone holding any other kind is going to take it in the arse just about tomorrow morning. Houses don't do much if the borrowing cost for everything else is blowing out. The amount of carnage that is going to take place tomorrow will take about maybe 3-5 weeks to show up and it ain't gonna be pretty.
well, just as money which gets scared out of equities seems to run into treasuries, there's no reason the opposite can't happen.
"Our economy and our markets will not recover until the bulk of this housing correction is behind us."
Alas, that's going to take a lonnnnnnnnggg time. The bubble pulled forward so much demand that even now the home ownership rate is still above 68% -- a full four percentage points above its historically typical level of 64%. Of course because the ownership rate among households headed by people middle-aged or older was already quite high, the only way to achieve those levels was to lure into ownership through easy lending young people who in the past would have waited to buy until their lives were more settled and they'd saved up a down payment. But instead they bought early at bubble prices, thinking they were getting in on a sure-thing investment.
Of course, those young people will suffer disproportionately in the coming recession, and a lot of them are going to end up foreclosed upon. So when they get to the age where in the past they would have had a down payment saved and be ready to buy, they'll instead be flat broke with a foreclosure on their credit report.
Since the market has depended on rising prices and sales to first-time buyers to provide the "equity" for the move-up buyers, the collapse of the first-time buyer pool will cause stagnation all the way up to the high-end markets, where there is a remarkable glut of supply. The coming huge price cuts that will be necessary to clear the high-end market will crush the pricing structure all the way down.
Well, I'm not paying taxes anymore. I think I'll renounce my citizenship too. I have no desire to be an American anymore. If anyone knows any Patriots or revolutionaries out there, please let me know.
jm, what you say is sad, but true, I think.
Gavshire, chill out. Now is not the time.
Gavshire, 35 years ago the President was freaking freezing wages and prices. This too shall pass.
Sorry,
Who really gives a damn.
This system is soooo skrewedd that it is only a mirror the future of entropy. Total darkness none can fight.
In the mean time, trade em if you got em.
"Alas, that's going to take a lonnnnnnnnggg time. "
yup, we follow the japan '95 script to the letter, yet no one ponders the fact that their housing prices fell for something like 50 successive quarters.
also, our demographic trends reinforce this, in a seriously ugly way.
"Total darkness none can fight."
Conjure says, "Yoda, is that you?"
Why not mp? this is disgusting. There are some causes in life worth fighting for. How can we as a society sit and watch while future generations are besieged by greedy tyrants. This is fascism, and I won't be a part of it.
Besides this whole ponzi scheme will collapse soon anyway. And I'd rather be out beforehand.
I hope those responsible for these crimes hang from the gallows, then burn in hell.
jm,
Quite agree and for the 20-35 year olds that are lagging behind the income curve now it is going to take gift and or inheritance equity and investment money from the boomer parents and grandparents, if they have any money left that is, six months from now.
There have been so many unexpected or unintended adverse consequences to this bubble burst so far and it will just keep coming.
I mean, Wall Street greed ends up killing their own Fannie Freddie goose. Oooopps, no more golden egg
parachutes from now on!
I predict the sacked Fannie and Freddie CEO's will not get to keep their bailout dollars under penalty
of . . .
Gavshire, go to a video store right now and rent "John Adams."
I'd recommend that you read John Adams, but you obviously need a dose of something, and right away.
By the way, Gavshire, I'm not making light of feelings.
No way am I doing that.
Gavshire,
The wonderful 'Sir' John Templeton nee born in Tennessee Lord of investing, denounced his citizenship in 1968 to escape onerous taxes in Merika. He moved to the Bahamas, a no tax county.
Jimmy Rogers now lives in Singapore. Bill Cara now has Bahamian citizenship.
Faber lives in Thailand and Hong Kong.
Money will grow wings and people can move. It's called capital flight.
Money always moves to where it is treated best.
Money always moves to where it is treated best.
Ame
The truly frustrating thing is that people in this country are so damn naive that they don't understand what is happening to them. Whether it is a failure of the educational system, widespread gullability, or a culture that has been trained to listen and believe anything the MSM spits out, there is NO way they will pay any attention until it is too late.
Wake the hell up!
It's all fine and well that money goes where it's treated best, but that's not all of it.
I've lived overseas and enjoyed it but, at the end of the day, I came back.
It's Heimat.
As for all of this bullshit, it will sort itself out eventually.
I'm not moving anywhere. I'm going to demand that Bernanke, Bush and Paulson are sent to prison. They are criminals and their time will come.
MP, I'll check out John Adams asap. Probably rather get the book though. I'll see if it's in stock at the library (it'll probably get me flagged by the FBI)
"Wake the hell up!"
You sound like Adams. And his cousin.
I recommend the "John Adams" video by HBO highly. It was well done and historically accurate.
Actually videos. I think it was a six or seven part series. Two or three discs.
Excellent stuff. Son of mp turned me on to them.
35 years ago the President was freaking freezing wages and prices. This too shall pass.
St. Louis Fed: Series: FYGFD, Gross Federal Debt
Did you have to bring that up?
Gavshire,
No sins go unfunished and no goods go unpaid. You get peace when both are even.
As crookeds in wallstreet say 'this is different and this is new economy' I would say this new era and era where things moves/changes fast. This knowledge era.
The pendulam swings like a speed of light. Before even the crookeds has time to realize what is going to happen to them.
The mass is stupid but they will wake up quickly and will show to the crookeds who is stupid.
Believe this, in this knowledge era things happen fast and they happen in big way.
45% of our country believes that humanity is less than 10,000 years old. google 'pew' and 'evolution' if you don't believe me.
we may soon be electing a woman from an extreme fringe of the Assemblies of God as VP. do the math.
I counsel patience.
yeah, it's said that we've let our country be pirated from under our very eyes. It wasn't China, or Japan, it was our own corrupt elite. The future of America could look like Detroit, once the world center of manufacturing.
"The future of America could look like Detroit, once the world center of manufacturing."
You mean the "documentary" I watched called RoboCop?
Again, I counsel patience. Americans are not as stupid as you think, but they are tolerant to a fault.
Re: I counsel patience.
Dr. Evil: How 'bout no, you crazy Dutch bastard
Citizen Kona, if you only knew.
SN, by the way, speaks the truth.
mp,
I have an amazing inability to write a few well thought lines and then be done with it, i.e, I can't do what you do so well, and that is why I hate myself and change names here, like so many rolls of TP. I long for condensed clarity, but yet lack the focus of your Dutch wisdom...
homedad,
Not sure what your project involves but fwiw...if feasible, prepare it with the potential to become a rental (private entrance, full bath, mini-kitchen, laundry hookup for a stackable, wired for phone, cable, & internet even if not active).
Hey, I was quoting tedbits traderview for whoever ask.
WHAT WILL THIS DO TO MORTGAGE RATES OVER THE SHORT TERM? 3 MONTHS? 6 MONTHS? 1 YEAR? Does anyone know?
WHAT WILL THIS DO TO MORTGAGE RATES OVER THE SHORT TERM? 3 MONTHS? 6 MONTHS? 1 YEAR? Does anyone know?
WHAT WILL THIS DO TO MORTGAGE RATES OVER THE SHORT TERM?
Track Economic Index Trends and Graph Financial Industry Rates
That was decided Friday, it's up to your government and China on how log it last.
It's quite on CR for the size of the meltdown that is happening right now.
That should be quiet...
I only watched the first of the three video clips, but what struck me was:
No mention of why or how F&F ended up in such tatters.
No mention of blame.
No explanation, except that housing is now in a "correction."
The implication was that this mess just happened, all by itself.
Don't forget this is by no means the first government program to transfer taxpayer wealth to homeowners and their lenders. Let's start with the tax deductibility of mortgage interest, about an 80 billion dollar annual donation to the relatively wealthy, probably including a significant number of regular posters to this forum, who are so offended when those beneath them get a scrap of cheese.
LO behold.. the Dollar it rises!
Yeah, real bungee action.
Anak Krakatau writes:
Yeah, real bungee action.
Hope the cord holds.
We'll see if it can be sustained when the markets open. Markets elsewhere are jumping happy about this decision.
mp: When a government sponsored entity issues $7.4 billion in equity that becomes worthless four months later, that should tell you that everyone involved is, at best, incompetent.
If it doesn't tell you that, you should be asking yourself about your own competence.
It tells you that you should check a mirror, because you have probably just had your f*cking face ripped off.
Pretty soon all these f*cking ripped off faces are going to add up to some real trouble. Maybe Benny can write a paper about skyrocketing CCI when you run out of faces to rip off.
EngineerJim writes:
Anyone who thinks that "the authorities" gives a rats ass about what is said in a forum like this (or any other forum) has one of two problems
In 2002 I was ranting about my managers at the Postal Service on a forum much like this one. In fact I ranted so often that if one did a Google search for "US Postal Service," my rants were the first 3 entries. Fortunately I made only insults and not threats, although they probably did deserve threats.
Anyhow, the authorities do take notice if threats of violence are made against public figures. There have been several news articles about how this is accomplished by special anti-terrorism software.
Time to repost this:
http://thumbsnap.com/v/Gdkm9MXQ.jpg
My appetite for thorough going witch hunt has been whetted.
I want heads on stakes, I want entrails of crooked brokers, I want crushed fingers of flippers, I want to stretch appraisers on racks, I want Mr SunTan to meet my maiden, I want the IRS to grind free money mortgage walkaways to dust, I want all of the ratings agencies electrocuted, I want a feast.
Villagers with burning brands, attend to me!
Oops, just me? Never mind.
(can I have a wack a Bill Gross, just because? It's just a little hammer, just like Maxwell's.)
Ok: Paulson is a shithead liar. It's unbelievably blatant. The government will pump money in now, but they must sell in 2010. I hope McCain has him strung up.
My promise: If either candidate says publicly, "I'd like to kick Paulson's can down the road" I'll donate $1000 to his campaign.
"unirealist writes:
I only watched the first of the three video clips, but what struck me was:
No mention of why or how F&F ended up in such tatters.
No mention of blame.
No explanation, except that housing is now in a "correction."
The implication was that this mess just happened, all by itself."
In the original statement text, Paulson and whatsisname (FDIC?) accepted that a good portion of the blame rests with the government. The government originally created the ambiguity about credit support, which allowed too much risk taking by management/shareholders.
Gavshire, you should listen to mp. So should the rest of the hotheads.
For all that I have a lot of hostility toward the people that accomplished this, let me counsel the same patience. If you really want their asses, you will need to be cold as ice and very very patient. Flipping out will never get you what you want in this kind of context.
This is too much money to run off with, and even bankrupted and prostrated, America is too big to ignore in the trifling matter of one robber's fate. It will be the work of a few months at most to strip them of their wealth and bring them before the courts in chains, should the political will be found to do so. Those that evade the grasp of justice will live the lives of hunted dogs, always watching for the Predator strike.
I'm not paying taxes anymore. I think I'll renounce my citizenship too. I have no desire to be an American anymore.
I would say that if you are in it because you profit from it, this shouldn't bother you. Just start looking for the new "best deal" like the rest of the rootless parasites who imagine themselves to be cosmopolitan when they're merely mercenary.
If you're angry because you really love America, then maybe you could calm down about burning your passport. If you're in it for the duration, failure merely presages renewal.
Don't repeat the Republican flaw of thinking it's not America if it doesn't obey your every whim. You'll be making designs on tyranny of the Republic soon enough if you go down that road.
If anyone knows any Patriots or revolutionaries out there, please let me know.
Don't grab for your gun first thing, you are a citizen and not a desperado. Don't soil your country with the blood of brothers and cousins spilled in civil war.
Look at what the Republicans have done to the Republic playing the card of division, do you want to double and redouble the damage those beasts have done? Do you want the scars of the Bush administration to linger for generation upon generation?
We're talking about putting maybe 35% of the population to the sword here, let's not kid around, because once the shooting starts, there will be no reconciliation. Are you sure you can actually win? Do you wish for your children to die before they themselves produce children, their lives thrown away in a war to root fundy scum out of some patch of Texas hills?
I assure you, it will be easier to pay off any debt incurred during their misrule than to pay off the survivors for their cousins' blood, or to fund the decades-long campaign of annihilation before the last Republican animals swing from the lamp-posts. It's an expensive and a chancy proposition, war.
I can't say the game seems worth the candle to me, but that's me, and I can see why others would still want to hoist the black flag and start slitting throats. Don't get me wrong, the Republicans certainly deserve nothing less than judicial massacre for their conniving after kingship and cultural hegemony under pretext of defending American in time of war. The question is, what does the Republic deserve?
Massacre breeds massacre and tyrant breeds tyrant. Are you sure that's the future you want for America?
Before doing battle, in the temple one calculates and will win, because many calculations were made;
before doing battle, in the temple one calculates and will not win, because few calculations were made;
many calculations, victory, few calculations, no victory, then how much less so when no calculations?
By means of these, I can observe them, beholding victory or defeat!
Money will grow wings and people can move. It's called capital flight.
They already a step ahead of us
404 Page | Admin | Mainstreet
".. This was created by congress a long time ago..."
"Live" On CNBC by Paulson on structural flaws in the entities.
"..and it's not going to be dealt with with this president and the congress still here.."
Try to catch the full interview on CNBC, hope they put it up on their site..
All this hype about the takeovers is
leading many to think it will be a bail
out of the US economy. And the Govt. wants us to believe it. Dow futures up
275 points with a lot of pushing from
the PPT probably. But what about all the
major economic problems that won't be
solved any time soon? Dow will still
be headed below 10k.
paulson raining on the rally -cnbc:
Paulson: Bailout Cost Depends on Housing Market Stabilization. Healthy Market Needed for Housing Recovery (story developing)
Paulie - Structure this!
I love this comment on Dealbreaker.com's write-up on Fannie/Freddie:
Although this is being played as the Treasury "seizing" Fannie and Freddie, it may well end up as Fannie and Freddie seizing the Treasury.
Paulson: Our collective work is not done
The Road to Serfdom.
Biggest CDS unwind in history:
Fannie, Freddie Credit-Default Swaps May Be Unwound
Sept. 8 (Bloomberg) -- Investors may be forced to unwind contracts protecting $1.47 trillion of Fannie Mae and Freddie Mac bonds against default after the U.S. government seized control of the companies in a bid to bolster the housing market.
Thirteen major'' dealers of credit-default swaps agreedunanimously'' that the rescue constitutes a credit event triggering payment or delivery of the companies' bonds, the International Swaps and Derivatives Association said in a memo obtained by Bloomberg News today. Market makers for the privately traded contracts will discuss how to settle them in a conference call at 11 a.m. in New York, the document said.
This is a big deal,'' said Sarah Percy-Dove, head of credit research at Colonial First State Global Asset Management in Sydney.The market is not experienced at settling a credit event for a name of this size, so it is a bit of an unknown.''
"Congressional cop-out."
Hey, at least they didn't raise the jumbo loan limit again.
Bogus
investors rushed to lay bets on a broad economic recovery
uh-huh, ok
I'm surprised by the number of people here who were disappointed - even outraged - by the F F decision.
As I read all the comments, my main surprise was that so many of them were predicated on the notion that we once traded in a fair and/or rational market. My second take away was that many of you should seriously consider running for political office - you will of course need some serious financial backing unless you are independently wealthy.
Here is my take on things - it's something I genuinely believe a large number of you should consider:
I do not own the market
I don't tell it what to do
Im a simple passenger
But Im not here for the view
I am not the engineer
I dont keep the train on course
and I dont stoke the boiler
thats for those who have real force
Im just here to take this ride
To listen and wait and sit
Until the market beckons
Me to take my small profit
"Dan Mudd, the CEO of Fannie Mae, is getting $9.3 million of severance for destroying his company. Richard Syron, the CEO of Freddie Mac, is getting $14.1 million--in part because of a clause he added to his employment contract two months ago, when it was clear the company was headed for disaster."
Market makers for the privately traded contracts will discuss how to settle them in a conference call at 11 a.m. in New York, the document said.
Now THAT will be an interesting call!
Heads up. This 'bailout' just triggered $1.47 TRILLION in Credit Default Swaps on Fannie and Freddie.
The clowns that wrote these CDSs are probably dead. No way this is spread out enough over the entire system to avoid at least some implosions...
Fannie and Freddie: CDSs, $1.47 Trillion Triggered
I don't understand why the "conservatorship" is considered to trigger credit-default swaps. Don't these swaps cover debt, while it is only common and preferred shares that are in "default"? In fact, isn't the stated purpose of this operation to protect debt holders?
To place a bet in the midst of chaos is an attempt to reap the wind. Let the chips fall, let the dust settle, and then size up the new game.
Hey, it was a great weekend for sales.
Can Erin on CNBC gush more?
Wise words, Byzantine Ruins.
Are you so sure, though, that it is only members of the Republican party that are to blame for this? Seems to me that the corruption has been bipartisan, and that this mess wouldn't actually have been averted if a Dem had one the last couple of elections.
FRE .99
Dollar menu time
Is there any broker dealer or trading system that isn't running incredibly slow right now?
As of the open, huge discrepancies between the widely traded ETFs (SPY, IWM, etc) and their underlying indexes - a lot of arbitrage to take advantage of. Otherwise, SKF is under $100 and I'd be nibbling - even if a very small nibble.
My second take away was that many of you should seriously consider running for political office
IMO, not worth it at this time.
This is what Han Fei Tze calls the "milieu of decaying states". To bring true talent to this table is to invite destruction, frustration or co-optation. As FMFM 1-1 (now MCDP 1-2) says:
Brilliance at one level of war may to some extent overcome shortcomings at another, but rarely can it overcome outright incompetence. Operational competence is meaningless without the ability to achieve results at the tactical level. Strategic incompetence can squander what operational success has gained.
The natural flow of influence in the hierarchy is greatest at the top. That is, it is much more likely that strategic incompetence will squander operational and tactical success than that tactical and operational brilliance will overcome strategic incompetence or disadvantage.
[As an aside, everyone should read these books. They're free and very educational.
http://www.clausewitz.com/CWZHOME/Bibl/mcdp1.pdf
http://www.clausewitz.com/CWZHOME/Bibl/mcdp1_2.pdf
]
In any case, better to lie back, cloaked in Confucian poverty and obscurity, and await a better season for sowing. That's not me flattering myself, that you are saying I should run for office, it's my advice to anyone who seeks to carry the burden of rulership in this place or time.
Standing on the borderline
Between joy and reason
Tending carefully my fire
Waiting for my season
I know who these people are
I know what they stand for
Corruptions built into this plan
Nothings under the other hand
--Iggy Pop, "Instinct"
I like Iggy's poem much better than my own.
Sponsored winners and losers now. Except that with CDS triggers popping now, even losers have huge destabilizing effect. Those tillion+ bets have to be paid and to do so a lotta RE, PM, stocks, and bonds need to be liquidated. No way to "save" anything now, its too interwoven. One save is another's peril. Game of bad Jenga now.
Seems to me that the corruption has been bipartisan, and that this mess wouldn't actually have been averted if a Dem had one the last couple of elections.
I think that the Republicans are the immediate cause of the current crisis. They pushed matters past the tipping point by forcing a mispricing of risk, by politicizing all opinions in public life, and by exploiting war fever to suppress all criticism of their policies after 9/11.
There's certanly a lot of blame to go around in larger scopes, but that's a game that ends when you blame human nature and society, things too nebulous to punish. That makes me suspect that people pushing the discussion in that direction are deflecting things into channels that render the issue more academic and less personally threatening. Hypothetical weighings of the greater blame are notional fig leaves for a real Guernica.
The looting of America is merely one symptom of the Bush administration's misrule. The Republican party is a national socialist enterprise -- fascists by technical definition, not prejoration -- and anyone who supports them is an enemy of the state by way of supporting the subversion of the apparatus of the Republic to serve private political ends. Period. I will not participate in or as much as I am able passively tolerate the rewriting of history to minimize the damage they have done to this nation's fabric, as I do not believe they will cease to connive to power and I do not wish to enable their return to power.
I can't resist a cheap shot
The mansion's lords are speaking
so deprive your thoughts of voice
attention is demanded
as if you e're had a choice
The blood and gore does offend
any sense of rhyme or reason
but let the lords sort this out
the change is more than seaso
Byantine,
Just before I order up a bunch of signs promoting your candidacy, please - PLEASE - tell me that didn't come off the top of your head.
A USA TODAY/Gallup Poll taken over the weekend shows:
"McCain leads Democrat Barack Obama by 50%-46% among registered voters . . .
In the new poll, taken Friday through Sunday, McCain leads Obama by 54%-44% among those seen as most likely to vote.
The survey of 1,022 adults, including 959 registered voters, has a margin of error of +/ 3 points for both samples."
Byzantine,
There is a lot of sarcasm on this blog, and I don't wish to be mistaken. My last comment was intended as a sincere compliment.
National polls aren't worth crap, El Cliffo. We don't vote that way.
PLEASE - tell me that didn't come off the top of your head.
It was, and I was so eager to post it for you to read, I left my lunch on the table at home.
Seriously, thanks for the flattery. I wrote for a living for about a decade, but it's still always nice to hear complements.
Hypothetical weighings of the greater blame are notional fig leaves for a real Guernica.
byzantine ruins comes from behind with the most elegant remark on this particular thread.