Why hello thar US tax payers money!

Quite possibly, and the whole situation was avoidable if the banks hadn't gotten insanely greedy.
 
Yeah, while mortgage rates are pretty low, houses are still buttfucking expensive.
 
Old news is old...

Knew about this like a month ago.

Hasnt messed with us yet...
 
The US Central "Government" Bank is already owned by a Bank. So the government isn't printing money, banks are. And they're charging interest to the government on every penny they create. Chances are it won't really effect anything. The government controlling some mortgage firms can't do much worse than a wonderful president many years ago already did.
 
Until now, I didn't know the US government had the authority to pick a company, fire its management, cut all paychecks to the shareholders, and take ownership without permission. I think the cause is a good one, but if Fannie and Freddie are private corporations, this doesn't seem constitutional. That said, the constitution isn't worth the paper its written on anymore.
 
Pompidou said:
Until now, I didn't know the US government had the authority to pick a company, fire its management, cut all paychecks to the shareholders, and take ownership without permission. I think the cause is a good one, but if Fannie and Freddie are private corporations, this doesn't seem constitutional. That said, the constitution isn't worth the paper its written on anymore.
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I believe this move falls under the same broad category as when they take over a bank that has solvency issues because Fannie Mae and Freddie Mac are financial institutions. And a bank doesn't have to actually fail for it to be taken over, if it's on the border the government can take over.
 
They, combined, have over 50% of the homes in the US. What would happen if the banks seized and put 50% of the homeowners in the USA on the streets? It was a necessary move.
 
Kotsu said:
They, combined, have over 50% of the homes in the US. What would happen if the banks seized and put 50% of the homeowners in the USA on the streets? It was a necessary move.
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I see what you're saying, and I understand completely. But I don't agree.
 
Orinna said:
I see what you're saying, and I understand completely. But I don't agree.
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Hey, I never said I agree with the course of action, but it was necessary from an economic standpoint. I'm saying that's why they did it. Those two companies becoming absolvent would ruin the entirety of our economy at this point. I don't want them saved, nor the clients who couldn't pay their bills. I pay taxes, I pay my bills not just on time but early, and I work my ass off. People need to stop getting handouts and be forced to do the same. Not literally forced, but just a "sink or swim" option. It's frustrating to know my tax money is going to help people who don't even pay taxes. IE: Worthless "members" of society.
 
if 50% of the houses in America had people kicked out of them the houses would be worthless since there would be no people left to buy them in all likelihood which would cause housing prices to crash due to overstock and the people kicked out of thier houses could buy thier houses back? Run on sentences ftw?
 
Khajit said:
if 50% of the houses in America had people kicked out of them the houses would be worthless since there would be no people left to buy them in all likelihood which would cause housing prices to crash due to overstock and the people kicked out of thier houses could buy thier houses back? Run on sentences ftw?
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Essentially, this is one of the likely economic scenario's. No doubt more shit would happen on a far more cataclysmic scale. Essentially, I believe we may as well not have an economy if these two business' capsized.
 
The problem is that these two companies both had their origins as part of the national government started around the same time as the new deal (or maybe as part of it i dont remember). Because of their charmed position in the hand of the national government it was understood by investors that their debt was backed by the national government and therefore the banks kept buying securities without keeping any kind of eye on their practices.

What this did in the past is lower the presumed risk of making loans and inherently kept the interest rates lower than they should have been but nobody complained because that stimulates the market. (furthering the inflation of housing prices that we are dealing with right now.)

Also because of their position they were able to grow to an obscene size i think they have almost 1tril in assests currently.

Truthfully at this current time they are "too big to fail" but they do need to fail also.

The way to fix this problem is to allow for the company to take on real privatization. Make fannie and freddie enter bankruptcy and also break down the company and sell off all of their assets. They still have enough assets that alot of people with large pocketbooks will come by and buy it all up and then the only people that will really be affected by the collapse is the stockholders who will be nearly wiped out (but that is a risk of owning stock that they should have known).

Ah but this is another problem and probably the strongest driving factor that is pushing for this bailout to happen. China's $376 billion of long-term U.S. agency debt is mostly in Fannie and Freddie assets meaning that we would be defaulting against our biggest lender in the US... the Chinese government. If we default against them then what idiots would ever buy US debt after this.

So.. in conclusion if the US actually planned on having a balanced budget and maybe even paying off some our our national debt then we should let fannie and freddie go completely private. If our plan is more of the same excessive spending on useless wars and programs then hell we are gonna need china's pockets.. don't piss them off and bail out freddie and fannie. All and all.. this is just another bandaid in the river.

Also next is the auto industry and then Lehman Brothers. We are on the slope now time to see how well we ski... Then after that we will probably have to bail out the FDIC.
 
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I was thinking for a while on this, and my opinion is that the US government should completely stand aside and let the chips fall as they may. Our whole system seems so screwed up at the moment that it seems like a good idea to just start over from scratch. At least when it's all said and done, we'd know where we stand, and people would be more careful in their business practices. Rewarding sloppy business practices seems like a bad idea. There was a nice coffee shop I used to visit regularly, but a Dunkin Donuts moved into town and drove the mom and pop cafe out of business. Survival of the fittest is the fact of life. The government can't play favorites.
 
Realistically it'll just be a matter of another 20-30 years before the banking industry discovers another risky way to make money and gets itself in trouble again.
 
And just think yesterday the goverment bailed out AIG as well and is now an 80% stockholder in the company. Lets play a game called guess the next company to get nationalized..

Even though i'm torn between Bank of America and Washington Mutual i am going to have to put my vote towards WaMu due to the fact that their situation looks much more dire and BOA just bought out Merryl Lynch which seems like a strategic move which would be good but i am thinking that it is probably just a ploy to make sure that they are "too big to fail" to guarantee that they do get nationalized instead of left to die like Lehman Brothers.
 
aww come on no takers? i let you guys even have the auto industry.
 
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