Socializing loss, Privatizing gain
Government Nears Deal To Take Over Fannie Mae, Freddie MacWASHINGTON — The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies, which together hold or guarantee half of the nation’s mortgage debt, a person briefed on the matter said Friday night.
This is why I get angry and so should you. Disgusting.
So the failure of the Republicans to talk about the economy is even more glaring today. Unemployment was up a lot and now another Friday bank dump.
This… with cataclysmic third quarter reports, just may do it…
The bottom’s in sight.
“Maybe the Chinese can buy us out….50 cents on the dollar.”
Do you hear it…
That is the sound of your tax dollars being thrown into a big hole, and it is going to takee a shitload of them to fill it.
For the last year the government has been allowing Freddie and Fannie to take higher value loans, buy some jumbos, and have allowed some lower quality loans to go to them… all the while having them do nothing about their capitalization issues.
There has been a huge transfer of garbage assets piled onto a pair of companies that did not manage their risk appropriately (and by doing so helped build the bubble in the first place). That transfer of assets came from investment and money center banks. The taxpayers are left holding the bag.
Before you all get excited about how the Bush administration did this, please remember that Barney Frank, Joe Biden, Obama, and tons of other Dems threw themselves behind the bill that opened us up to this… they were all jerking us off about how they were helping the little guy with the Housing Bill… in reality roughly $900MM were directed to helping homeowners – the total potential liability of the bill is roughly 1.48 Trillion dollars… a lot of it guaranteeing the failing GSEs…
Bush may not have regulated, the Fed may have been responsible because of monetary policy after 9-11 and lack of oversight of the industry, but a lot of the taxpayer money that will be lost and the responsibility is on both parties…
These same politicians took political contributions from these same companies they were supposed to oversee… this will probably cost roughly half of what the Iraq war cost…
This election season, while you talk about the Palin daughter’s illegitimate child, get excited about all the partisan talking points, please remember they (all of the filth in Washington) stole from you – that is what they are there for – the rest of this is all window dressing…
You got robbed.
Nice! Adam offered up his place… he has the NFL ticket, so we could see something besides the start of yet another heartbreaking Eagles season…
(Not) Brian…What happened to the Bu$h veto????????
Good article in the NY Times on Thursday about China’s losses on it’s $1 trillion US holdings and the effects on its central bank.
I never said there was not blood on their hands…
Your comment is a perfect example of what I would expect on the site though.
These bastards get to steal from us because:
1-People do not care about this stuff beyond slogans
2- To the degree you do care it is only to point fingers at the other side
Expect more from the Democrats. I feel the Republican party has been co-opted by religious fanatical scum with no concern for anything but making money with their power. You guys going to do what they did and let their party drive itself into the ground by justifying everything they do and not turning a critical eye toward their policies?
Biden is (in my opinion) the worst example of where the Dems will be going – voted for the Iraq war (before he was deeply opposed to it)… fights for the little guy, unless there is Bankruptcy reform on the table and MBNA is shoveling cash to him and his son.
Do I prefer him to the equivalent scumbag on the Republican side? Sure, but they are both filth. I don’t look at all this like it is a sport, I don’t pick sides and blindly support…
This is the kind of stuff that really steals money from the pockets of the poor and middle class. This keeps us from paying for education and infrastructure, this is where our wealth is passed up the food chain. It is disgusting. And it barely gets a mention on the news. Why would it when we can talk about teen pregnancy or Obama being a muslim, or the cougars … all this shit is the window dressing to make us feel like it is a Democracy… it is a Plutonic Cleptocracy…
Well said NB….short of the complete destruction of our infected democracy there will be no real change with either candidate. It is the choice between two evils.
Something of an interesting article. We’ll (probably) bail out the two largest mortgage firms, being quasi-public entities, because we don’t want to see so many people getting kicked out of their homes. Good Lord, I’d have expected liberals to support this kind of thing, even though it will be, in effect, taking tax money from people who were responsible enough to buy homes they could afford to subsidize people who bought McMansions they could not.
And it won’t be long before we hear about a bailout for Ford and General Motors, because so many thousands of unionized employees work for them, and we can’t let them lose their jobs!
So, what’ll happen? I bought a house I could afford, and while it’s nice, it isn’t particularly large, but I’ll wind up paying higher taxes to help out the poor soul in Hockessin Valley Falls who bought a McMansion from Toll Brothers for half a million dollars. When all is said and done, I’ll still be living in my comfortable, but still small, 100 year old Victorian which could use some electrical updating, and the guy who gets my tax dollars will still be living in his half-million dollar house in Hockessin Valley Falls, partially paid for by my tax dollars.
And then, he’ll be so grateful to the Democrats who gave him my tax dollars to keep his home, that he’ll keep voting for Democrats.
And David – Just read that article… it is almost funny – their growth was on the back of our consumption – which would have been fine if they did not have to put so much of their reserves into our currency to stay affordable to us… that house of cards is crumbling…
One really interesting thing they mentioned in the article is the idea of them putting reserves into foreign stock… that its a little scary…
Good Lord, I’d have expected liberals to support this kind of thing,
*
BULL FUCKING SHIT
What should happen is re-mortgaging opportunities for anyone who is failing to make these balloon ATM payments.
Keep your house, keep your mortgage and continue your obligations and the US keeps out of bailing out the freaking bundling speculation that caused this mess in the first place.
The Blue Dog DEMs (cough Carper cough) and the GOPers deregulated this industry (Phil Grammm a nation sobs for you).
Yeah Dana!
Lets forget the Bush administration opening the flood gates to let Fannie and Freddie buy a ton of Alt-A paper and other loans that were not allowed! Let’s forget the banking regulation in general (or complete lack of it)! Lets forget the truckloads of money both parties took and start pointing fingers!
That will help your tax bill!
Why discuss an issue or look at the reality when you can act like this is the debate team and your side needs to win! How ignorant…
Also, the McMansion people in foreclosure do not benefit from any of this even if they get assistance. They will permanently be damaged by the bubble. The beneficiaries are the irresponsible banks and the politicians who rolled in the money they were throwing around… and they will keep doing it because we don’t hold them responsible.
This bailout will be funded with foreign debt not direct taxpayer dollars (although an increasing amount of your taxes will be used to pay interest). Too many countries have a vested interest in the success of the dollar. China will continue to buy our securities as it has no other choice. A failed dollar leads to an increased yuan which leads to an economic disaster in China. This is already occurring on a small scale. Several other countries fall in the same pattern, but to a much smaller extent. As NB noted above, it is China’s intent (and many other foreign investors both private and public) to invest in foreign (US) stock that is scary. Instead of thinking about a governmental bailout of GM or Ford, think about a Chinese ownership. Their potential rewards for a turnaround are tremendous.
This is why all the rhetoric – cut taxes, raise taxes, tax the rich, tax the middle, tax the corps – doesn’t really matter. The next administration (an many subsequent administrations) will inherit an unmanageable tax situations. We cannot grow our way out of this one. Between the inevitable failure of Social Security and Medicaid, the endless war on both drugs and terror, and the unbelievable debt to foreign countries, the next President will have no choice but to raise taxes or cut programs. The real question is, which of these do you support.
David –
I agree with much of what you said, but on the direct impact on the tax payer I disagree…
Currency markets are the most liquid markets in the world… we will pay for this too… The $1.60 Euro of a few months ago and all the money each of us are paying more for oil because of our depressed currency is where we will all pay for it. Not directly through taxes, but there is no free lunch anywhere…’
The Chinese will pay for it too, but the benefit was the rapid expansion of their economy… at the end of the day they will come out ahead (with an economy that actually produces things) and I have a feeling we will struggle for a while.
And should the Euro Zone do better than the US through this economic cycle (and they will – their fundamentals are much stronger right now) even more of the polish will come off our currency… and less liquidity and a weak currency means lower growth over the long-term.
Agreed – my thoughts were that a blatant federal tax increase on the masses to pay the increased foreign debt isn’t likely. Its much easier to quietly cut programs which only effect a few people, typically the poor as they have no voice. This will likely push additional costs on the States, who will have little choice but to also cut programs and/or increase taxes. We will all pay, it just comes down to how.
Obama’s tax the rich plan has no teeth either. The wealthy will always find another way. They will simply move their money somewhere else. Congressional leaders always leave a loophole. Its in their best interest. Most privately feel no personal need to participate in the rob the rich feed the poor programs.