Treasury: More Support for Fannie and Freddie
Submitted by
CalculatedRisk on Thu, 12/24/2009 - 12:21pm (260 comments)
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patientrenter wrote:
Somebody has to eat all those real estate losses, and it is not going to be JPM or BAC - it has to be the taxpayers! This is how it is written in the Constitution, no less
The Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years
But hey, TARP is profitable!
More BS.
Whatever happened to material information? Where's the SEC?
Treasury goofed. They should have released this news 5 or 6 hours later. Folks on the West Coast still haven't checked out yet.
FNM/FRE = Big 19 dumping grounds.
Should be interesting to see how rates react to this. If they go up too much, I bet the treasury starts buying again and fast..
Imagine how much damage 30-year loans at 8% would do.
SEC= Securing Everyone a Commission.
I Will Bear Witness: a Diary of the Nazi Years 1933-41, by Victor Klemperer, is a critical thinker's diary of events as they transpired. It's full of interesting things about economics, all while being a Jewish Professor, in the midst of having most of his rights taken away from him...
"Under the new terms announced Thursday, the cap on Treasury's support would increase according to how much each firm loses in a quarter, "
Does this mean the Treasury support in a given quarter would be no less than their loss in that quarter?
One more post on recommended books and then I will give it up.
I also enjoyed, "The Wisdom of Thomas Jefferson."
especially this quote:
Capital may be produced by industry and accumulated by economy, but only jugglers will propose to create it by legerdemain tricks with paper.
-Thomas Jefferson
thanks JD, I will check it out. Sounds very interesting.
29 pieces of bacon, a quart of Wild Turkey and 2 packs of cigarettes so far today.
I'm glad you guys are paying my insurance for me.
Thanks.
"Under the new terms announced Thursday, the cap on Treasury's support would increase according to how much each firm loses in a quarter, beginning the first quarter of next year and through 2012. The cap in place at the end of 2012 would apply thereafter."
Hahahahaha. So Treasury has a cap on losses. The cap is whatever each firm loses.
Man I would be laughing if I had to write these press releases. That is so, bendover taxpayer and take it good and long, that I'm truly amazed.
given all this support from the Treasury why does FNM still trade at $1/share?
They suspend the small Treasury purchases while the Fed continues to buy hand-over-fist, even when home demand is very low.
If there is any sign that the PTB are determined to keep air in the housing bubble, regardless of the moral hazard or long-term economic damage caused by postponing a reckoning with the underlying economic imbalances, it is continued govt money poured into housing through the FHA and GSEs.
There is not even the semblance of an effort to deal with the underlying problems. They're not even pretending any more.
We should give prizes to the first person to find Treasury press releases online. Geesh .... there is a bubble in Treasury websites! I keep finding new ones!
best to all
This is what CR has been saying, if I read right.
BankRapture.
Hallelujah!
We're going to pass the plate...
I thought the Fed was the only buyer of agency MBS. I guess Timmay & Ben were bidding against each other.
The Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years
Are Fannie/Freddie heavier or lighter burden for the US compared to Greece for the EU?
Submarines move quietly unseen & undetected beneath the surface... until the missiles are launched and ERUPT to bring ruin on their intended targets.
One ping and one ping only!
Treasury can just put additional losses on their Bank of America credit card, after 2012.
patientrenter, they are saying it openly. Here is Geithner in Newsweek:
"We were very careful from the beginning ... to say that we are going to focus the bulk of the financial force on bringing interest rates and mortgage rates down to cushion the fall in housing prices and help stabilize home values, which will feed into people's basic sense of financial stability."
What Still Keeps Timothy Geithner Awake at Night? - Newsweek.com
They will do anything to support house prices to create a "sense of financial stability".
best wishes
CalculatedRisk wrote:
The best way to hide a needle is to bury it in a haystack. Now everybody get busy - start looking!
My holiday book recommendations:
The Ascent of Money - Niall Ferguson
Freedom - Daniel Suarez (release date 1/7/2010)
Lower Your Taxes - Sandy Botkin
And, they forgot to add how much the bonus's were, just two more years so they can completely rob the Treasury this time.
My quart of Wild Turkey is gone so I guess I'll hop in the old car and drive down to the liquor store at top speed.
Thanks again for the insurance coverage, suckers.
HomeGnome wrote:
Partial to Maker's Mark myself.
2009-12-24-15-34-59-24543: TREASURY ISSUES UPDATE ON STATUS OF SUPPORT FOR HOUSING PROGRAMS
CalculatedRisk wrote:
Yes, you are right, CR. And I'd seen this type of very direct statement before too. It's just so breathtaking that it shocks me when I see it so blatantly in word or action.
I mean, how many debates have you seen from serious people about the long-term wisdom of keeping home prices high? Everyone averts their eyes and just ignores it, and pretends that higher prices are always good (as in "the housing market is improving" when prices go up). I expect that from the masses, who mostly have a stake in a home's value, but the leaders of our economy should be looking at the biggest picture. Sigh...
The plan is to crash the dollar. They are looking for someone to blame. China is the front runner at this point.
CalculatedRisk wrote:
2009-12-24-15-34-59-24543: TREASURY ISSUES UPDATE ON STATUS OF SUPPORT FOR HOUSING PROGRAMS
They just uploaded it
It seems to me this is another illegal act. Only Congress is supposed to appropriate funds, and in the prospectus for every Fannie and Freddie bond it says explicitly the bonds are not backed by the U.S. government. Treasury doesn't have the power to piss our money away like this.
hmmm- working on acronym's
When is a cap not a cap...
or
If you lose it we cover it plan
Aren't ceo's getting $6million in bonus for 2009?
Fannie and Freddie CEOs to get up to $6M in pay
Imagine how much damage 30-year loans at 8% would do.
If by damage you mean much-needed price correction, then I agree with you.
"Only Congress is supposed to appropriate funds, and in the prospectus for every Fannie and Freddie bond"
Congress gave Treasury the legal rights to pursue this avenue last year.
HomeGnome wrote:
I hear tell from a reliable source who knows it first hand and is unimpeachable, they been cutting the bird with Ancient Age a little and a little more each year for nearly two decades
warning---causticcomment to follow
"sense of financial stability"
Is that like being lubed up with novacaine on the brown star prior to a royal effing?
Thanks! I added the link ...
best wishes
poic,
horse****,
from the release,
"Treasury is now amending the PSPAs to allow the cap on Treasury's funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years."
Congress did not give Treasury the power to change the rules and spend as much money as they want.
This is what is wrong with America
"Joe Roberts, 59, left a RadioShack at a mall in Madison, Wis., with a huge smile and the PlayStation3 his teenage son insisted on for Christmas.
He said he delayed making the $300 purchase because of economic concerns. A self-employed designer of manufacturing equipment, Roberts is getting less business every year and his wife might soon lose her job as an office manager."
When you are about to lose both incomes you don't buy your son a PS3, you sit him down and explain exactly why you won't be buying it.
poic wrote:
If it increases home prices, Congress either has approved it already, or they will. If I were dreaming up these schemes at the Fed or Treasury, I'd only bother to check in with Congress on the legality just long enough before the roll-out date for them to rubber-stamp it. As long as it keeps home prices high, they will rubber-stamp anything. Hell, the folks in Congress are dreaming up the same schemes. It's a giant state-sanctioned Ponzi scheme.
"Congress did not give Treasury the power to change the rules and spend as much money as they want. "
Sure they did. It was part of the middle of the night must pass stimulus bill that no-one in Congress bothered to read.
I am off to the kitchen
See you later...
MrM, thanks - Steelhead got it first. It really appreciate the help.
best to all
Danny wrote:
Mortgage rates going from 5% to 8% is the same as a $100k loan going to a $70k loan. That translates to a 20-25% sales price drop.
The brightest need to look this up, don't believe it can be done without Barney's approval.
RATM wrote:
It's kinda cute that you think Timmy cares about that.
Your Congress may be corrupt but it is not stupid. They have crossed their i's and dotted their t's when it comes to covering their legal behind.
poic wrote:
But, but that's not the Merican Way.
"The brightest need to look this up, don't believe it can be done without Barney's approval."
So it is a done deal then.
Rob Dawg wrote:
Well, it's pretty clear that's all theoretical, given Tim's "we'll do whatever it takes" commitment to keeping home prices elevated. And Ben and Barney and Larry and Chris are all agreed on this.
Which makes further drops in the dollar a dead certainty.
poic wrote:
Is there any difference between adding $100 to savings versus an extra $200 in debt?
"But, but that's not the Merican Way. "
Lol, I see you're channeling NarM now. So true.
"Is there any difference between adding $100 to savings versus an extra $200 in debt? "
A huge difference.
Eric wrote:
I know Timmy doesn't care. I wish someone outside of Treasury would... but I'm just wishing in this kleptocracy.
It seems I should NOT have been hanging Xmas Decorations after finishing that quart of Wild Turkey.
I fell off the ladder and broke my arm and my leg but you guys have me covered INSURANCE-wise right?
Thanks again.
HomeGnome wrote:
No problem. You don't mind if we give the damaged arm and leg to the dogs, do you? Thanks for getting the marinating going early. Very thoughtful.
Treasury also said it would put off for one year setting the amount of a fee charged the companies in exchange for government aid.
i noticed the other day that the non-TARP financial backstop's don't have a neato nickname; that way the Administration can keep making public pronouncements that it has earned a profit from TARP. meanwhile the other deadbeats keep bleeding taxpayer cash.
"I fell off the ladder and broke my arm and my leg but you guys have me covered INSURANCE-wise right?
Thanks again. "
We don't let the Libertarians know the secret hand-shake. If you don't use it with the ambulance driver or the ER doc you get dumped on the side-walk. (:
SNAFU wrote:
Apparently the two different parts of PK's brain don't talk to each other. There isn't much point engaging in heroic medicine for a patient who has suffered a natural death . It will be the first time in history that somebody will restored to health by administering more of what caused the person to die in the first place.
PK has the correct diagnosis of the problem but the solution he is offering is for a completely different ailment.
poic wrote:
IMO there is no difference. Most people can hardly save. They also don't recognize that their living standard is rapidly declining.
They are like deer stuck in headlights.
poic<
I thought the secret handshake was "Liberal Lefty".
China tightening could undo risk markets: James Saft - Yahoo! News
REBear wrote:
The sooner most people figure out and embrace a lower standard of living the better off they will be in the long run. Down sizing by choice is much better than being forced to do so.
CalculatedRisk wrote:
If one makes the following assumptions (1) recessions do end (using PK phrase at some point they die a natural death) (2) once the economy starts growing incomes will start to increase (3) the Fed/Treasury are successful in increasing inflation (BTW over a year ago my cousin who is at HBS- told me that they goal is to increase inflation because that is problem the Fed thinks it can deal with- i.e. change the current problem that you don't know how to solve into something that you think you can solve).
Under those assumptions is it not reasonable to conclude that homes in the future will be worth substantially more and therefore it makes more sense to stabilize prices now through government intervention (the underlying fundamentals will in time catch up with the prices) rather than running the risk and uncertainty of a free fall in housing prices?
"IMO there is no difference. Most people can hardly save."
That's my point as to why there is a huge difference. The mindset of one who saves an extra $100 versus the one who takes out an unnecessary $200 in debt is what affects the long term financial health of these two groups of individuals. By unnecessary I mean $200 in debt for a PS3, I'm not talking about $200 for medical bills.
So full faith and credit for three years? Bizarre.
And the Administration has the authority to do this how? I thought Congress makes these decisions. What funding is available for this? Has it been appropriated?
"poic<
I thought the secret handshake was "Liberal Lefty".
Wink"
Nahh, Liberal Lefty is the secret hand-shake for liberals. Smack to the forehead is the secret hand-shake a liberal gives a libertarian. We need to sit down so I can show you all the Berkley, CA gang hand-shake. (:
"So full faith and credit for three years? Bizarre."
They still haven't come out and given an explicit full faith and credit. Still trying to walk a fine line. Cover the losses without having to take the debt onto the public balance sheet.
poic wrote:
Or you buy it and talk to him about 'ruthless default'... and other valuable things he will need to know about getting by in the future.
Good thing there's a bottomless pool of people willing to loan the good old US of A money, all of whom are too stupid to see what's in front of their face!
"Under those assumptions is it not reasonable to conclude that homes in the future will be worth substantially more and therefore it makes more sense to stabilize prices now through government intervention (the underlying fundamentals will in time catch up with the prices) rather than running the risk and uncertainty of a free fall in housing prices? "
Ask the Japanese how this approach is working for them.
crazyv wrote:
I get stuck on where the money will come from. Who can afford the high priced houses? (at no more than 3x income). Also, global arbitrage is still bringing U.S. incomes down, and I imagine it will for years.
josap wrote:
How do they know this time the changes are permanent? They are repeatedly told the economy is "growing" again and job loss is a lagging indicator.
We are Japan and will be for the foreseeable future.
This is good news for Franklin Reins! His retirement of $1.4M + benefits is still good for cooking the books at Fannie.
dryfly wrote:
Ah ha.
Now we know what dryfly is manufacturing.
No doubt this is their response to the fear of the Fed ending their MBS purchases, since they know without more, unlimited backing, the MBS market would implode. We will see how well it works. MBS are outstanding for theoretically 30 years, practically 10, so a 3 year backstop might not cut it. Probably won't for the Chinese, since, if you will go this far, why not full faith and credit? That's always been the issue - the govt is willing to put in hundreds of billions, but not give full faith and credit. This has actually backfired as it has made investors even more skittish, as it demonstrates the govt will go to any lengths, but will absolutely not give full faith and credit.
From Bloomberg on this release:
"The Obama administration is “beginning to realize it’s not getting better and it’s not likely to get better” soon in the housing market, said Julian Mann, who helps oversee $5.5 billion in bonds as a vice president at First Pacific Advisors LLC in Los Angeles. “They don’t want the foreclosures now, so they’re saying, we’ll pay whatever it takes to continue to kick the can down the road.”
I just purchased it from Amazon hardcover. The book recommendations I have found on CR are invariably good. Thanks to all.
crazyv wrote:
crazyv, house prices are cyclical. We encourage and boost the upcycles. If now we prevent the downcycles, we have a home price ratchet, making real home prices even higher over the long run. But home prices are still too high. We need them to come down. No one is looking at the long term economic damage of artificially boosting prices in a large sector of our economy, but the costs are real.
I'd guess that this over-pricing and resulting over-investment in housing has contributed significantly to the hollowing out of our domestic industry. But I'd like to see a real public discussion. If we agree that it has consequences like this, then people will stop supporting house prices, knowing that this change is necessary for our long-term economic health.
Congress can't delegate to the Executive unlimited appropriations authority. the uncapped backstop is pure administrative jawboning.
the peak loss cycle in mortgages is in years 3 - 6, so a 3 year backstop where the govt pumps in just enough to keep their heads above water might not be enough comfort for investors buying new issuance MBS.
cr didn't mention this part either - they don't have to shrink their portfolios.
"Treasury also on Thursday moved to relax a requirement that the companies shrink their portfolios of mortgage securities by 10% per year beginning next year. Treasury will allow them to base the 2010 reduction on the maximum limit on the size of the portfolios -- $900 billion -- rather than their actual size at the end of 2009."
broward wrote:
We don't take no stinking credit cards... the terms we get from our customers are FAR worse.
A few trillion on healthcare today, a few trillion for Fannie and Freddie.... at this rate, when will we start facing quadrillions?
ghostfaceinvestah wrote:
US Housing prices topped in aught six,
8 days away from 2010.
well past peak losses for pollyana bottom callers.
bANK fAILURE wrote:
I'd guess mid-2007 for the absolute peak.
Santa showers Fannie, Freddie with cash
By Colin Barr, senior writerDecember 24, 2009: 4:19 PM ET
NEW YORK (Fortune) -- For top executives, 'tis the season to get paid in company stock - unless you happen to work at Fannie Mae or Freddie Mac.
The taxpayer-backed mortgage giants disclosed Thursday that they could pay out as much as $40 million to their top 10 executives for work in 2009.
It's cash time for top Fannie and Freddie execs - Dec. 24, 2009
Basel Too wrote:
After Nov 2010 [or rather Jan 2011] all bets were off anyway. That is the real event horizon they need to 'worry' about.
I read the interview with Tim Geithner in Newsweek. (Thanks, CR.) There is nothing there indicating that he sees the big picture, and understands all of our issues but sees beyond them, further than we can. There's just a sense of someone who knows that bailouts always 'work'. End of story. Nothing more.
Under the new terms announced Thursday, the cap on Treasury's support would increase according to how much each firm loses in a quarter, beginning the first quarter of next year and through 2012. The cap in place at the end of 2012 would apply thereafter.
Mighty wordy for
We're kicking the can till after the next POTUS election.
Greed, greed and more greed. Merry x-mas.
America's Greediest: The 2009 Top Ten | OurFuture.org
After Nov 2010
it occurred to me the other day that we will probably do two 180's within a 4 year span. i don't know if the masses are actually for anything more, as much as they are against things.
patientrenter wrote:
They always do - form the perspective of those getting bailed.
The dollar has already lost a lot of value recently. But if there is a decent uptick, I will be taking full advantage. Tim and Ben and the rest of the PTB can easily control interest rates and US asset prices, but it is a little harder to manipulate the forex market. And their commitment to easy money, Ponzi-scheme house price levels supported by too much lending, and so on is breathtaking and irresponsible.
[goes into corner and tapes mouth shut so that wife can't hear him scream about not buying more Canadian dollars]
black dog wrote:
Making it to Nov 2010 is gonna be tough - Nov 2012 almost impossible. They will need to do some triage in between - pick some to save and some to let go. Should have done that early 2009 but probably too late now for that. Won't have enough time to dispose of the corpses before the next election.
Oh well - live and learn.
Basel Too wrote:
The important thing is to not vote incumbent in the primaries. Too many party safe districts. In the primaries however you are likely to be given a real choice and even if it isn't enough it will send a much amplified message. Your primary vote is multiplied many times over.
CR posted:
So how does a bank "earn" more profit than its "competitors"?
Maybe it lends to more creditworthy entities... But then the interest rate would be lower, because those entities can shop around to other banks. (If they don't they are making "bad financial decisions") Maybe it pays its "talent" lower bonuses... Bwaahhaaahhaa. Maybe it's a safer bank in the long run and gets market share. But other banks' deposits are guaranteed as well. Maybe it pays its investors a lower dividend. But then it can't attract as much capital, and it only "makes money" by lending out more capital.
There is something inherently wrong with the business, all right, it's with the model. Because a bank dollar is a dollar, whether it's squeezed from a depositor, a bonus-earner, a borrower, or the FDIC. Banks do not grow pies, they slice them into pieces.
Basel Too wrote:
I think it is also quite possible. House looks real shaky for Dems... Senate not sure - haven't looked hard at which seats are up & who is running where. Not that I pick it right anyway - missed both '06 and '08. Though was rock solid '00, '02 & '04.
I am going to be a democrat so I can get two chances to vote Bum Nelson out!
Hamp Short Sales directive ends in 2012 (3 yrs) as well.
see page 2
https://www.hmpadmin.com//portal/docs/hamp_servicer/sd0909.pdf
"29 pieces of bacon, a quart of Wild Turkey and 2 packs of cigarettes so far today.
I'm glad you guys are paying my insurance for me."
party on, dude! It's all good. At least we know we won't be paying for your long term care. More bacon?
Are you implying that Americans are schizophrenic?
Rob Dawg wrote:
Primaries? Opposition?
Gee I thought all seats went unopposed now.
barfly wrote:
And he's paying taxes... wooo hooo!
Prisons: Madoff had dizziness, high blood pressure - Yahoo! News
HomeGnome you should just wrap the cigarettes in bacon, drench them Wild Turkey and broil for 5 minutes or so. Tasty and gets the deed done in one fell swoop.
Senate not sure
because of unending media coverage, senators have near lifetime tenure. joe lieberman lost in the primaries and still won the general.
I would say that one could easily call the top in Aught six for housing, summer aught seven was the beginning of the credit crisis, which manifested in the fall of aught eight, and cumlinating in March of this very year.
I kinda try to keep up.
We have to be going.
Later Taters.
The left wing blogs are ablaze with thoughts that Rahm is illegally involved with Fannie/Freddie--is it an issue here also?
Top in the East Bay, CA for housing was around August 2005.
Basel Too wrote:
JL was an exception - most need party machine support. There are rumors floating around that he goes GOP next time [2012] and might even switch sooner if Dems crack in 2010 - right now he is playing it both ways.
patientrenter said: "The dollar has already lost a lot of value recently. But if there is a decent uptick, I will be taking full advantage. Tim and Ben and the rest of the PTB can easily control interest rates and US asset prices, but it is a little harder to manipulate the forex market. And their commitment to easy money, Ponzi-scheme house price levels supported by too much lending, and so on is breathtaking and irresponsible."
Long "UUP" is one of the situations I'm looking at for the new year. Bouncing sharply after re-testing its 2008 low is pretty compelling.
PS DB USD IDX BL FD ETF Chart - Yahoo! Finance
Sebastian
bANK fAILURE wrote:
Fair enough. I only tracked about 500 zip codes in SoCal in detail around that time, and most of them topped out around May-June 2007. Sounds like you tracked even more, even more carefully.
Mel wrote:
Involved with both Fanny & Freddy? Not that there is anything wrong with that but I hadn't heard.
Sebastian wrote:
Leave it to Seb to pick one of the most manipulated funds out there.
Basel Too wrote:
70yo Boxer in California is vulnerable. Whitman as governor and Fiorina as Senator and you have a national political earthquake.
Mel wrote:
Except O, everyone else is illegally involved.
HomeGnome wrote:
LOL!
Merry Christmas, HG!
" Bouncing sharply after re-testing its 2008 low is pretty compelling.
Leave it to Seb to pick one of the most manipulated funds out there. "
Bouncing sharply = manipulated or momo. Pick your poison. But probably a good pick if you can time your exit properly.
Vatican: Woman Jumps Barriers, Knocks Down Pope at Christmas Eve Mass
---CBS News.
ee<
!
Sebastian wrote:
Good luck! Your investing horizon is shorter than mine.
Every time I try to get out; you guys keep pulling me back in.
poic wrote:
I was referring to the trading halts, and announcements of new shares, when it was clear by reading the tape that someone knew beforehand.
"Every time I try to get out; you guys keep pulling me back in. "
When you leave be sure to drop slabs of bacon along the path so that you don't lose your way back to CR.
29 pieces of bacon, a quart of Wild Turkey and 2 packs of cigarettes so far today.
I'm glad you guys are paying my insurance for me.
Thanks.
Dawg pops an extra Lipitor™ and places at market price open orders long Pfizer and Amgen.
"I was referring to the trading halts, and announcements of new shares, when it was clear by reading the tape that someone knew beforehand."
So I shouldn't be buying this as part of my long-term diversified portfolio is what you're saying?
(CBS) A former CIA operative with the most direct experience fighting al Qaeda on the ground and who predicted the 9/11 attacks has "no doubt" the terrorist organization will strike U.S. soil again.
Ex-CIA Operative Warns of Terror Attack - 60 Minutes - CBS News
---Now I am pretty sure I heard old C*nty Lice on the ole TeeeVeee post 9/11 saying that NO ONE COULD HAVE SEEN THIS ATTACK COMING!
Who's lying?
un-ruly
http://www.cnn.com/2009/WORLD/americas/12/24/brazil.custody/index.html
"Dad, son head to U.S. after Brazil reunion "
We have a story that can be repeated every five minutes tomorrow.
poic wrote:
Says the two guys who own SRS.
Who's Whitman? Christine?
What do you have against Brad Sherman? (Never answered...)
Republicans can keep dreaming that people will vote against Democrats, but they won't be voting "for" Republicans any time soon.
from the story I posted above:
/snip
To do so, he offered tribal leaders "a carrot and stick," says Crumpton. "The carrot would be if you come cooperate with us, we will reward you and your people. The stick was if you did not cooperate, the chances of your survival were greatly diminished," says Crumpton. Some tribal leaders were killed to make the point, he says.
That's how the U.S. needs to deal with the current situation in Afghanistan, says Crumpton. "This is not going to be a war that we win, certainly in a conventional sense, anytime soon," he tells Logan. "In Pakistan and elsewhere where you see enemy's safe haven, where they are the power…we must be the insurgents. We must work and recruit with locals and we must collect intelligence…engage in subversion and sabotage," says Crumpton.
---I see; become terrorists to defeat terrorism.
Riiiiiiiight.
LOL.. listening to Tull's 'Bungle in the Jungle'.... "I'm a Tiger when I want love".
Wonder if Woods is a fan?
Carte Blanche happens...
JimPortlandOR (profile) wrote (in reply to...) on Thu, 12/24/2009 - 3:22 pm
What, did this turn into another Tiger Woods thread?!
Ben and Timmy are like the jamie and adam(mythbusters) trying to float a car with ping-pong balls....
It will work...fail....fail...fail...
Adam says "Okay take out the engine!"
oy vey
Happy Holidays and Good Luck in 2010
mp and Conjure Bag
"Republicans can keep dreaming that people will vote against Democrats, but they won't be voting "for" Republicans any time soon."
and that you can take to the bank. The R's had eight years to clean up any causes of this mess, and they blew it, big time.
"Says the two guys who own SRS. "
Ahh long short fund. SRS for my short position and UUP for my long. What could go wrong. I'm gonna make sick money on the difference.
1 currency now -yogi wrote:
Meg. Early polling has her slightly behind Gerry Brown.
mp<
The additional FNM & FRE support from the gubbmint is another gift to the financial industry and a sh%t sandwich for everyone else.
What was the Fed thinking when they let Wall St. turn our housing market into a ponzi scheme?
Every Fed member should be fired immediately.
Remember, Wall St. targets safe stores of wealth like housing, bank deposits, social security, etc.
poic said: "Ahh long short fund. SRS for my short position and UUP for my long. What could go wrong. I'm gonna make sick money on the difference."
I was also thinking of GDX as a companion short.
Probably won't be any end to the grief I'll take here, being essentially long the dollar and short gold.
Sebastian
Gawg, We now have political savents on CR. Hoocoodanode
I was originally planning for SRS to be the main present for my wife. Now it's small enough to be a midgets stocking stuffer with room to spare.
barfly wrote:
That's about right. I like to think of it as a bi-partisan looting of the public weal, organized in a competitive but ultimately cooperative manner by members of Congress, the Administration, and other public bodies, in close coordination with the private parties who get the financial benefits. It's competitive, but it's a friendly game. Paulson, Geithner, Summers, Emanuel, Frank, Dodd, Bernanke, Blankfein etc are really all on the same team. Whether you stick D or R on them is not very important.
essentially long the dollar and short gold
clearly you'll take grief....
1st what's your definition of essentially?
you are short gold or your not.
YouTube - JOHN LENNON Watching the Wheels
---Sometimes it's best to sit back and watch the wheels go round and round.
Comrade Rally Monkey said: "1st what's your definition of essentially?
you are short gold or your not."
"Essentially" is because GDX is an ETF of gold-mining stocks.
S.
patientrenter<
Wall St and FedGov have committed TREASON against the United States of America and her citizens.
so your not short gold...
your short businesses that mine for gold, with all the trial's and tribulation's that are involved with those efforts.
why not just say that.
you could just as easily say your short oil. or energy. all major inputs to mining ops.
Mel wrote:
Kewl! I'll pass that along to my friends in the right wing blogs-
,rad Seb is merely long dollars, isn't he?
Comrade Rally Monkey wrote:
GMAFB.
I'm long GDX, purely because it's a high beta play of the price of gold. It's not that hard to figure out.
after a disasterous 2007 & 2008 , i'm doubtful.
Is Rahm the one with beaty eyes always avoiding the press and in a constant run to keep everything out in the open and transparent.
Unlikely allies want Rahm out - - POLITICO.com
It's not that hard to figure out.
oh really.
then what do they hold right now?
So does this mean anyone with a fannie/freddie mortgage will be able to stay for free, forever?
dr munch wrote:
No. The losses won't be 100%. Maybe 30%.
Rob Dawg wrote:
Gerry Brown the same old 'Jerry' Brown... kinda like GWB wasn't the same as George [HW] Bush? Is there another Brown?
barfly wrote:
Rasmussen has done polls that indicate that voters would prefer to vote for conservative candidates that were running under the "tea party" label. Damn the Neo-Cons f#c%ed us up-
Comrade Rally Monkey wrote:
Are you claiming they don't own the stocks they claim?
MaryAnn wrote:
What's a savent?
Eric, this forum has been a great source of learning for many.
Alerting people to the problems and issues of etf's is just one.
I've been a vocal critic of them on this board from the day I started posting.
Whether it's TLT, GDX, GLD, USO
whatever....dont' trade'em...if you have an opinion on a market-go to that market. trade the real thing.
It's not that hard to figure out.
patientrenter wrote:
Sort of like 'Let Obama be Obama'? Where have I heard something similar to that before?
MaryAnn wrote:
Bulging eyes (thyroid issues?) and a bulging vein on his forehead-
Cinco-X wrote:
"Conservatism" as defined by Republicans inevitably led to neo-con. What else would a big government conservative Party do but create a fascist empire? I never saw Republican "conservatives" actually make anything smaller.
Cinco-X wrote:
SAVE Next Time?
patientrenter wrote:
Won't load for me-
Cinco-X wrote:
That's a foamer.
Is that TILE cash'n'carry fillin out a HAMP form after he builds his "shed"? Id think it would be fallout shelter (save self from pitchfork wielding mob.)
Comrade Rally Monkey wrote:
OK, so you think there's fraud.
Proof?
I don't know eric, what stocks do they claim to own....today.what quantites? what leverage?
NOTaREALmerican wrote:
That's not true.
My paycheck is a lot smaller.
Comrade Rally Monkey wrote:
You're the one claiming fraud........ you present the proof. That's how it works.
dryfly wrote:
I don't know that reference, dry. (I try to avoid political discussions.) I was just responding to others saying that Rahm was under attack. I assume any successful and powerful WH person will be under attack, for good or ill.
I did just notice that Rahm was on Freddie Mac's board, so it reinforces my point that all these people belong to the same screw-the-public club, regardless of what label they wear to get into that club.
broward wrote:
HA! Yeah, that too. I was going to add "except themselves".
patientrenter wrote:
See Jim Watt and Ronald Reagan
broward wrote:
You must be an exception. We all know incomes are going up now
Cinco-X wrote:
They will say crap like that until they learn what 'conservative' means... seriously. Its the very same issue the 'real left' faces... sounds great until the masses discover the real agenda. There is a reason they are out there on the extremes - both sides. The mass in the middle wants none of it - too painful. Campaigns discover all that and more.
Me I expect the GS party to win - either that or the JPM party. Too much money out there for them to want to split it via ruling coalition.
Is the portfolio static? If not, what's the turnover ratio? how much are they paying the manager? the custodian's? The marketing VP?
you know all these answer's , right? and how it affects your return? I'm assuming you do. And that's great for you. But they're not graet for everbody. Not even close.
gruntled wrote:
paycheck <> income
dryfly wrote:
... until they don't
Comrade Rally Monkey wrote:
Oh, OK... you're not claiming fraud. Fine.
I don't want to try and pick the best or worst 10 miners for my investment. I'm willing to pay someone else a cut to do that.
Treasury removes cap for Fannie and Freddie aid - Yahoo! Finance
Treasury removes cap for Fannie and Freddie aid
Fannie Mae and Freddie Mac receive unlimited future funds from taxpayers to stay afloat
"
While most analysts say the companies are unlikely to use the full $400 billion, Treasury officials said they decided to lift the caps to eliminate any uncertainty among investors about the government's commitments. But the timing of the announcement on a traditionally slow news day raised eyebrows.
"The companies are nowhere close to using the $400 billion they had before, so why do this now?" said Bert Ely, a banking consultant in Alexandria, Va. "It's possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets."
"
Merry Christmas to All, and to all a good night
" My paycheck is a lot smaller.
You must be an exception. We all know incomes are going up now"
Browards just into the mental recession crap. He just needs to snap out of it.
Cinco-X wrote:
I am not technical, Cinco, so I can't fix that for you. But try googling rahm and politico.com
HomeGnome wrote:
I can understand bopping Berlusconi but what's the point of tackling the Pope?
"Italians Gone Wild"
MrM wrote:
>
Don't confuse the bailed out and the bailers - it always works well for the bailed... not so much for the bailers.
dryfly wrote:
The weirdest part for me is that I do not see an outcome I could hope for
- Hung Congress means nothing will be done, an Austrian dream scenario of letting the chip fall where they may
- Republican Congress, Democrat Congress - gosh, we already had for too long with disastrous consequences
Dear Santa - Can we get a third party, please?
patientrenter wrote:
Where is Rahm on the list? Does he come before or after Timmy, Summers, and Ben?
And the pay czar is a rubber stamp.
Party of Common Sense
or KISS?
dryfly wrote:
My point was that the Republican Party has a very bad image problem. The Dems may be working on one too, but it probably won't be enough to ruin them prior to 2010.
broward wrote:
They do make taxes smaller for the rich, but just take out the credit card and charge it.
The Charge and Loot party.
I'm not pickin on you Eric.
But we've just had another poster think that he's short gold because he's short GDX. Does that make much sense to you?
There's a place where you can be in a "real" hi -beta bet with gold. and that's the CME.
as always, jus sayin
dryfly wrote:
Until the time when being bailed out becomes sufficient proof of guilt and carries its own punishment.
It almost happened with constraints on executive compensation for banks that took TARP, but the government quickly backed down.
Next time it might not be this Administration who will be pulling the strings
He may be a beaty eyed savent but at least he knows how to use a spell-check.
As usual, the Democrats will fracture because liberals will not put aside ideological differences just to stay in a power coalition, get something done for the sake of doing something, or blindly support authority.
Republicans don't usually trouble themselves with such moral dilemmas.
Republicans offer tax cuts to the super rich using debt money.
Democrats offer unlimited taxpayer paid bonuses to the super rich.
2009 reaching an end...pretty much no accountability, no transparency, no justice, no reform. Great year. Just think what 2010 won't bring. Im SO excited!
REBear wrote:
Dear Santa - Can we get a third party, please?
GDD9000 wrote:
It's ending well, I just got free health care!
It is sad how twisted our language has become.
provide capital
The actual phrase should be
force taxpayers to borrow money to make whole gambling banksters, or else go to jail.
Fixed it.
Cinco-X wrote:
The Republicans are ideologically split the same as the Democrats. This split allows the smart amoral scumbags to grab even more power with in each Party. The country would be better off if the Republicans officially split into a Christian Right Party (fascists) and Conservative Party (Libertarians - but you can't use the name). The Democrats could then, for the county, split into a Socialist Party and Liberal Party (the names of both would have to be different, of-course).
This doesn't benefit the smart amoral scumbags of the nobility class, so it ain't gotta chance in hell of happening.
Dubba-you tee eff!
I thought this was a mistake. How can they guarantee unlimited support?
Then I read the amendments...
From the Freddie Amendement released today:
Maximum amount means as of any date of determination, the greater of a) $200B or b) $200B plus the cumulative total of Deficiency Amounts determined for calenndar quarters in calendar years 2010, 2011, and 2012, less any Surplus Amount determined as of December 31, 2012, and in the case of either a or b, less the aggregate amount of funding under the Commitment prior to such date.
Further annoyance. In paragraph 8(c).
At the election of Seller, the Periodic Committment Fee may be paid in cash or by adding the amount therof ratably blahblahblah. Seller shall deliver notice of such election not later than three business days prior to each Periodic Fee Date. If the Periodic Commitment Fee is not paid in cash by 12:00 pm (New York Time) on the applicable Periodic Fee Date(irrespective of Seller's election pursuant to this subsection), Sellar shall be deemed to have elected to pay the Periodic Committment Fee by adding the amount theof to the liquidation preference of the Senior Preferred Stock, blahblahblahbah.
NEW YORK TIME! ARE YOU KIDDING ME!? THIS WAS RELEASED BY OUR TREASURY DEPARTMENT! IS THIS TYPICAL? If I am doing Business in Los Angeles, can I just write in my contract, "Los Angeles Time"? Was this Press Release put out by some outsourced peasants in India? Because that is not elementary English!
RATM wrote:
FIrstly, I think we need to avoid get fixated on a rule of thumb established 20 years ago when interest rates were much higher. I don't think it matters what the multiple of income a home is priced but rather what percentage of income is devoted to the mortgage payment. If one assume 31% of income devoted to a mortgage payment - the multiple at 5% &7% is 4.8 and 3.85.
I have gotten many different numbers for median income- but one number I did see was $50,000- if so then the median price home should be $240,000 at 5% or $192,000. At those levels the current price level is not that much out of wack. I grant you that there are a lot of homes that are in the 700-1000,000 range than there are people who can afford them and the problem maybe more granular- surfeit of McMansions.
Lastly, my conclusion was based on a series of starting assumptions. It was an attempt to show that there is a set of assumptions under which the policy being followed by this administration makes sense. While viscerally I have a problem with the administration is doing but there is a way to reason to it.
patientrenter wrote:
From Yves Smith
“Jane Hamsher, Grover Norquist Call for Rahm Emanuel’s Resignation” « naked capitalism
We write to demand an immediate investigation into the activities of White House Chief of Staff Rahm Emanuel. We believe there is an abundant public record which establishes that the actions of the White House have blocked any investigation into his activities while on the board of Freddie Mac from 2000-2001, and facilitated the cover up of potential malfeasance until the 10-year statute of limitations has run out.
...
If the Treasury approves the $800 billion commitment to Fannie and Freddie by the end of the year, it will mean that under the influence of Rahm Emanuel, the White House is moving a trillion-dollar slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.
Before the White House commits any more money to Fannie and Freddie, we call on the Public Integrity Section in the Justice Department to begin an investigation into the cause of Fannie and Freddie’s conservatorship, into Rahm Emanuel’s activities on the board of Freddie Mac (including any violations of his fiduciary duties to shareholders), into the decision-making behind the continued vacancy of Fannie and Freddie’s Inspector General post, and into potential public corruption by Rahm Emanuel in connection with his time in Congress, in the White House, and on the board of Freddie Mac.
We also call for the immediate appointment of an Inspector General with a complete remit to go after this information.
We both come from differing political ideologies. One of us is the conservative head of a transparency foundation, and the other is the publisher of a liberal political blog. But we make common cause today out of grave concern for the future of our country in the wake of corruption-riddled bailouts. These bailouts continue to rob Main Street to benefit Wall Street, and, because of that, we together demand the resignation of Mr. Emanuel, a man who has steadfastly worked to obstruct both oversight and inquiry into the matter. Rahm Emanuel’s conflicts of interest render him far too compromised to serve as gatekeeper to the President of the United States.
We will lay out the details further below, and are available at your earliest convenience to meet with you directly.
Sincerely,
Jane Hamsher
Grover Norquist
And the madness continues. Endlessly.
Merry Christmas!
free for you. But someone will pay for it. And more money will end up in insurers pockets. Im mostly referring to the financial and economic crisis that is by no means over.
MrM wrote:
Joke:
Guy prays to God: God, let me win the lottery.
God: (silence)
Guy: God, let me win the lottery.
God: (silence)
(repeat many times for humorous effect)
Guy: God, let me win the lottery.
God (speaks to guy): Dude, I'm all powerful, but sometimes I need some help. You've got to buy a lottery ticket first.
Moral. There are third Parties, but people won't vote for them.
"If one assume 31% of income devoted to a mortgage payment - the multiple at 5% &7% is 4.8 and 3.85."
I would say that 31% rule of thumb is still very valid. For most people now that IO arms have gone away your monthly payment is fixed once you purchase the home, regardless of whether your mortgage is 5%, 7% or higher. It affects the size of the loan and thus price of the home you can afford. I never hear anyone talking about what they can buy at a mortgage rate of X%. What I tend to hear is X is the amount I can afford on a monthly basis, what is the maximum home I can afford? Which is why I think 31% is a valid rule of thumb regardless of the mortgage rate.
The rational Fannie and Freddie exec would rush to lose as much money as possible to her cronies. Cash that guarantee; arbitrage the taxpayer. Don't let
/JPM/AIG grab it all...
3rd Party For Congress...
I'm outahere. Have a good Christmas everybody.
So is this the long awaited bailout of CMBS? I know that's not in their "mandate", but when has the constitution and law been observed recently.
...
FNM/FRE own a boatload of CMBS.
Grover Norquist. GMAFB. Not like he has any axes to grind.
All you Cons vote third party. Please.
Has anyone found the articles of incorporation for the Treasury to be a For-Profit organization?
If there was a supposed profit, why are'nt those funds being redstributed to aid other entites?
Comrade Rally Monkey said: "But we've just had another poster think that he's short gold because he's short GDX."
With the explicit qualifier of "essentially," which I made at the outset and then explained.
If you don't like or trust ETFs and believe trading a commodity directly is the only way to do it, you're perfectly entitled to that opinion, and, sincerely, more power to you. However, assuming that I'm deluded in thinking one thing is exactly the same as another when they clearly aren't and I never claimed they were...isn't a charitable thing to do on Christmas Eve.
Sebastian
REBear wrote:
At my last company, the rule was that if the company as a whole lost money, no one anywhere in the company got any bonus. Period. Obviously Feinberg, Treasury, and Congress don't believe in applying such harsh rules to their fellow members in the Poltical-FIRE complex.
NOTaREALmerican said: "I'm outahere. Have a good Christmas everybody."
Me, too. Drinks and early Christmas presents await.
Happy Christmas!
Sebastian
duly noted. you said essentially short gold...when in fact you were not.
you clarified your position. GDX is Not a GOLD short. So even to say essentially short gold is falacious. No?
barfly wrote:
Don't get all pissed at us; we didn't bugger wealth care reform-
ghostfaceinvestah wrote:
do you have any data on Japanese home prices relative to income at the top of their cycle compared to the US,. Also what their increase in population has been over that period of time? I don't - but I don't believe that the US prices got any where near as crazy.
Also to the best of my knowledge the Japanese economy wasn't driven by MEW. Theirs was an investment driven economy and an aging society . The collapse of the investment side coupled with an aging society which as a greater proclivity towards saving had a big contribution. The only similarity between the Japanese and US is that both preserved zombie banks. Although I would say the US approach makes a little more sense than the Japanese - at least the US is trying to preserve the value of homes and thereby preserve the banks . The Japanese just tried to keep their banks alive who deeply exposed to commercial real estate and corporate loans.
Headline is better than the article itself but Yield curve predicting inflation, not growth surge
| Reuters
but writer does mention that those who ignored the predictive potential of the inversion of the yield curve in 2006-2007 made a mistake in doing so.
HomeGnome wrote:
If the Virginia Tech gunmen had been Muslim instead of a crazy Korean wouldn't that have qualified as terrorist attack? BFD of course there will be a terrorist attack- now if this expert could tell me what kind of attack now that would be interesting. BTW I think several years before 9/11 there was a foiled plot I believe in France to hijack a plane and crash it into a target.
Of course if anybody had said prior to 9/11 we have this risk that a terrorist could hijack a plane and take control of the cockpit so we should spend some money reinforcing cockpit doors - I wonder how that would have been fought by all the airline lobbyists?
Cinco-X wrote:
We are on the same page - except don't count the Dems out - by Nov 2010 they'll be in a head to head race to the bottom & Reid Pelosi could easily impact first. As with all of it Hu knows...
crazyv wrote:
crazyv, I will rise to this bait... once.
The reasoning that the price of a home doesn't matter is only justified if you never expect to pay that price out of an excess of your own earned income in excess of spending, and instead will fund the price out of gains on a prior home, or from selling to someone else in the future (aka "greater fool" pricing).
The rule of thumb that a home should not cost more than 2-3 x income date from well before 20 years ago. The 28%/33% DTI rules were applied AS WELL, not as a substitute. (This goes to show that we have lowered lending standards quite a bit over time. Why are we surprised that we have a debt problem?)
Even when inflation and interest rates become high (as around 1980, say,) the same price multiple rules apply. If inflation and interest rates are zero, the amount of home you can afford is the same as if inflation and interest rates are at 10%. (I am ignoring for simplicity the adjustments due to taxes.) Why? Because although when int/infl are high you have to pay a lot of interest monthly, your home appreciates by that much more every month due to inflation, so you have a cash drain, but your balance sheet is unaffected.
There are lots of details and adjustments, I know. But the basic point is that, although the DTI rules should be used because cash flows are important, the ratio of price to income should be critical in determining affordability, and will be if we ever exit from that "greater fool" theory of endless future house price appreciation well in excess of inflation.
broward wrote:
LOL! Ya take that to the local clinic and see what they say!
poic wrote:
There. All fixed.
Didn't a Muslim just commit a terrorist attack on our Army in Texas?
HomeGnome wrote:
First , we need people who can speak the language. Shortly after the invasion of Iraq there were more Arabic speakers in the Indian Embassy than there were in the entire US establishment! The British understood that if you were going to run an Empire you had to have the ability to go native. The only people surprised when the Shah was deposed were the Americans. I heard recently from a US foreign service officer that the US found out about the Russian invasion of Afghanistan from a Peace Corp member who called them to tell that he had seen Russian tanks.
I think we have to recognize that we (as a nation) don't have the stomach to get involved in these types of wars. We will never be able to bring to bear the ruthlessness that counter insurgency requires. Rather than becoming what it takes to win I would much rather we just didn't go down that path.
More support for Fannie and Freddie? Backed by the full faith and credit of the US government. And what about junk bonds like the proxy HYG? And what about municipal bonds like the proxy MYI? What about commercial real estate like the inverse proxy SRS? What about General Growth Properties (GGWPQ) as another example of commercial real estate? Then compare these with the 20 year US treasury bond (TLT) which is going down in value, while the above are going up. All of them seem to be backed by the US treasury and the federal reserve thru TALF, TARP, electronic printing, the PPT, and borrowing from the taxpayers and foreigners. The interest rate on the long term treasury is going up and is at its high for the year and close to its 3 year high, while the interest rates for municipal bonds are close to their 3 years low and that for junk bonds are going down to the one year low and not that far off from their 3 year low. Can anything be more indicative of a fascist or corporatist state? All of these debt instruments and commercial entities seem to be equillibrating to reflect the full and EQUAL support of the government.
dryfly wrote:
I thought we got mandatory health care, not free health care.
Cinco-X wrote:
Broward was making a funny me thinks...
Oh well got the roast in & have to finish making dinner.
Merry Christmas all - and of course Festivus for the rest of us!
Cinco-X wrote:
From what I can tell, it's mandatory to buy it until you are broke, then it's free.
So I guess if you start out broke...???
I am off - Merry Christmas and whatever other excuse you use to share a nice dinner, good wine and lovely presents!
"So I guess if you start out broke...??? "
Another great incentive to live off the fat of the land.
poic wrote:
I think you and I are in agreement- I was challenging the 3X income which is quoted often here by making the point that it was rule of thumb based on interest rates at the time. The point of my example was to demonstrate that at different interest rates ( the key driver of the monthly mortgage payment) you can get very different loan amounts.
well, if not, every time seb post's something, I'm frightened. Is that terrorism?
Lobbyist Ben Dover wrote:
You complain about freeloaders but never offer to trade places.
Here's your chance, Ben!
More regulation? How could they stay competitive with international airlines? Some gubmint agency which doesn't produce anything is supposed to tell businesses how to run a successful business? The free market can handle the problem. Passengers will choose safer airlines next time they fly. Oh, wait...
broward,
I had more fun not being a freeloader. I started pretty close to the bottom and didn't like it.
Hey, hey! Careful with that! No one could have foreseen that tactic. No one.
Samuel Byck - Wikipedia, the free encyclopedia
Why do they need to worry? A half-trillion of walk'in around around money and ACORN will solve that problem. Oh, and if you thought this healh bill was done on the QT, wait until 30 million illegals are brought in to permanently vote for the rats with a new amnesty bill before the next election. You guys are looking at one party rule for not only the rest of your lives but the rest of your childrens lives...if your grandchildren are lucky.