What you say is true as far as it goes, but I wish this particularly virulent strain of American Manichaeism wasn’t blinding you and nearly everyone else to the terrible existential risks arising out of this situation. It’s not just you and people like Bill Maloni who think that George W. Bush and all his acolytes are the spawn of Satan out to get Fannie because of their tilt towards the Democratic party; some of the best banking analysts in and around the American Enterprise Institute feel that all would be well if only the GSEs weren’t distorting Adam Smith’s invisible hand.

Sometimes I think that Bill Poole may be the last grownup in the whole country. At least he is trying to nudge the Fed away from the implicit guarantee before the avalanche of trillions of dollars worth of Fannie and Freddie obligatinos comes crashing down on Congress.

The reserve currency status of the US dollar is yours to lose if you don’t lay aside partisanship right now, wake up and smell the systemic risk.

As the guilty party that started this off-topic thread (on July 5th 2006!) I can’t help but comment. About a year ago Congress tried and failed to pass legislation that, among other things, would have provided a basis for Fannie and Freddie to be declared bankrupt. Not only are the big GSEs too big to fail, there is no legal mechanism to recognize they’ve failed

Remember F&F between them have over $1.4 trillion in off-balance-sheet deals with counterparties who by now have plenty of their own problems. The Fed’s Bill Poole has been trying to shed this financial albatross for years, but it would seem to be too late now.

Since Fannie and Freddie already enjoy defacto nationalization, it only remains for Congress to recognize that agency debt is full-faith-and-credit US sovereign debt and plug into their spreadsheets the additional trillions of unrecognized (since about 1972 when Freddie’s charter was changed) debt.

That might end the war at least.

And just the other day we learn that FASB wants to end QSPEs altogether. Guess I got that one right

Ambrose at The Telegraph reports both the UK and Spain are in worse shape than the US with their unwinding housing markets.

In about 5 weeks when Fannie reports its ’07 10-K (or doesn’t) we should learn how at least some of the final details of this story will play out.

Congratulations on your continued success keeping this site up. You’re certainly providing a valuable service.

Bring on the free bread and circus!

Now I’m picturing the following request:

Hey Bartender- serve me up another milkshake, and send the tab to Uncle Sam!

The question is, who do we send to Dr. Phil? The “shake-a-holic” or the uncle?

borrow a good, strong, healthy cow from someone who trusts you
ride the cow
milk the cow
cut chunks off the cow one at time as desired for consumption
use the cow to pull ever increasing loads & burdens
don’t feed the cow
don’t water the cow
don’t let the cow rest
give away the cow’s production (milk, meat, strength, etc) to your buddies
neglect and abuse the cow at every turn
don’t let the people who own the cow check up on it
keep the cow hidden from all and do this in secret
declare your own brilliance at animal husbandry at whim
tell the cow and it’s owner that “you’re doing something to help”

when the cow is on it’s last possible leg, give what’s left of the cow back to the owners, and demand that they (or their children / grandchildren) provide you with 2 new cows immediately so you can “do more good”

~~~
This just came pouring out of my head when I read yet another article about the government “doing something to help.”

I’m not sure if the cow best represents our dollar, our economy, our consumers, our current & future generations of taxpayers, our international goodwill, our economic sanity… or all of the above.

I’d better call Dr. Phil! (or Dr. Freud)

That’s one of the few comforts, isn’t it? There just aren’t a lot of people who qualify for these jumbos- so I guess we wait and see what looney government program they come up with to try and overcome that one–

Look at this, there’s a reason why there is a credit crunch.. because investors are not buying loans BECAUSE home values are going down and they don’t want to be holding on to collateral that is worth less than the loan.

Now tell me why if buying loans are so risky that Fannie should step in and buy these loans?? Its like you have a truckload of rotten vegetables and nobody’s buying and farmers are losing money… and the nice guys in Capitol Hill say.. OH! Its ok, Fannie will buy it.

If Fannie is an arm of the govt of Saudi Arabia, then fine, let them buy the rotten vegetables, but ultimately the US govt is going to have to bail Fannie out and its going to come out of my freakin tax money.

http://www.azstarnet.com/sn/biz-topheadlines/224169

Even more on this story at:

http://www.azstarnet.com/sn/firstmagnus/

Igor’s word is especially appropriate: vultures

Refinancing: Only for the privileged few:

http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?cnn=yes

But then I realize, that in orderto actually get the loan, people are gonna have to come up with 20% down, i.e 145K.

When I realized that fact, I could sleep easy. This expansion of FM&FM will do nothing, since it will only affect a small amount of people.

Just more window dressing in an election year

Jefferson must be rolling in his grave.

We need more statesman, and fewer politicians.

President Thomas Jefferson 1802

Laugh or cry
Prudence is toast.

Hey, when I started Doom, my intent was to focus on prices in the Phoenix SE Valley. I kind of got distracted along the way.

You won’t get complaints about being off-topic from me. : )

forgot the link and sorry for the size of it and sorry about making the first post off topic

Today I am reading the news and I find this neat little story about CC companies jacking up rates and squeezing their customers like juicing oranges in one of those fancy juicing machines, you know the ones…they only leave the skin and get all that good juice out.

Well the thought occurred to me….what if they hit 25% of their customers with unjustified late fees? Considering the MILLIONS of people out there running balances on their cards how much money could a scam like this net. Dang easy way to prop up the bottom line…money for nothing…..