Bail Out Time?___Until NEXT round?

[Green Hornet]

Originally Posted By Mark Raney
"(hopefully more lenient) administration is in place."

Mark please explain how an administration can be more lenient that what we have seen the last 7 years.

 

[Karl]

BUT!! This time we gotta decide, which of the Titanic do we save first?? & where does the money come from this time around, even the taxpayers are broke.

 

[Riick]

The system is set to privatize the profit and socialize the loss.
.... Isn't it a good deal? if you make money, you are on your own. If you lose money, the government is going to bail you out.

Beautiful !!
I've never seen the situation expressed better.

 

[Mark to market]

Originally Posted By Mark Raney
"(hopefully more lenient) administration is in place."

Mark please explain how an administration can be more lenient that what we have seen the last 7 years.

Green Hornet, you have an excellent point, even though the current administration has made noises about reining the GSEs in, they have in reality done very little.

The following is a quote from a WSJ editorial July 21, 08.

“Behind the scenes, Mr. Frank is also demanding that the new, more powerful regulator for Fan and Fred not get up and running until next year, though the companies are in trouble right now. Like the management of Fan and Fred, he’s assuming an Obama Administration will go easier on the mortgage giants then will the Bush Treasury.”

 

[Green Hornet]

Mark,

Thank you for replying, however a quote from an editorial that is guessing someones thoughts and motivations carries little to no weight. Especially a paper now owned by Murdoch. A direct quote from Mr. Frank saying this would take it out of the realm of rumor.

 

[Mark to market]

Green ,

Many consider the Dems to be the primary backers of the GSEs as they have continually rallied against those who wish to tighten restrictions. In addition it is of interest that the GSEs have a record of hiring Democratic power brokers for upper management positions.

Some examples would be;
Franklin (ill gotten) Raines, ex Fannie CEO and Clinton White House budget director.
Tim Johnson, ex Fannie CEO and prominent democrat who chaired Mondale’s White House bid and who was on a committee of three to appoint Obama’s vice president until he was caught in a mortgage scandal alluding he collected more the 7 million in below interest rate loans.
Jamie Gorlick democratic assistant attorney general and chief policy advisor to Hillary Clinton.

(Just a small point here, but what possible qualifications did Gorlick bring to a secondary market mortgage company other then political influence?)

Other then ties to management, Congress has had some crucial votes in the past three years with the Dems favoring less restrictions for the GSEs. One example is that Fannie whose original charter forbade them from being in the primary market, skirted the congressional mandate with their desktop underwriter program. This allowed them to bring loans from the primary market thru to securitization and off to investors with out the oversight an independent appraiser ever viewing the property. In other words their compensation was based on how much their AVM valued the loan. Many saw that this could lead to a mortgage crisis and in 2005 Senators Hagel, Dole and Sununu tried to pass a bill (S.190) forbidding Fannie from any primary market activity. Unfortunately it was opposed by the Dems and did not pass.

A more recent example would be Harry Reid who last week refused to allow a motion to be voted on which would forbid Fannie and Freddie from making political donations or lobbying .

If you doubt the WSJ article perhaps you could provide some examples of legislation from Chris (personal loan fraud) Dodd, Barney Frank or Chuck Schumer that support restrictions to the GSEs

 

[Mark to market]

Fannie was created in the 1930s during the Roosevelt years because conventional banks that borrow short term have a hard time lending money over a 30 year time span. At the time of their creation they were run by the govt. In 1968 during the Johnson Administration Fannie was privatized due to financial pressures created by the Vietnam war. Privatization allowed for the debt to be taken off the govt books. It also allowed for dividends to be paid to shareholders raising the cost to those that borrow. In 1970 Freddie Mac was created so that there would not be a monopoly.

With the mantra Profit is Privatized and Dept is Socialized the GSEs have leveraged themselves to where their debt approximates the public dept in America. Bringing them back as a govt entity would lower interest rates for the average borrower by as much as one percent and get rid of a great deal of corruption that is systemic to the beltway.


At least McCain is on record stating he would like to see Fan and Fred “go away” (as in receivership) and would like to see an end to their multi million dollar lobbying campaign.

If the Obama campaign supports GSE reform, one would wonder why they have not come out with one comment saying so

 

[Mark to market]

Fannie was created in the 1930s during the Roosevelt years because conventional banks that borrow short term have a hard time lending money over a 30 year time span. At the time of their creation they were run by the govt. In 1968 during the Johnson Administration Fannie was privatized due to financial pressures created by the Vietnam war. Privatization allowed for the debt to be taken off the govt books. It also allowed for dividends to be paid to shareholders and a focus on quaterly results raising the cost to those that borrow. In 1970 Freddie Mac was created so that there would not be a monopoly.

With the mantra Profit is Privatized and Dept is Socialized the GSEs have leveraged themselves to where their debt approximates the public dept in America. Bringing them back as a govt entity would lower interest rates for the average borrower by as much as one percent and get rid of a great deal of corruption that is systemic to the beltway.


At least McCain is on record stating he would like to see Fan and Fred “go away” (as in receivership) and would like to see an end to their multi million dollar lobbying campaign.

If the Obama campaign supports GSE reform, one would wonder why they have not come out with one comment saying so

 

[Mark to market]

Fannie was created in the 1930s during the Roosevelt years because conventional banks that borrow short term have a hard time lending money over a 30 year time span. At the time of their creation they were run by the govt. In 1968 during the Johnson Administration Fannie was privatized due to financial pressures created by the Vietnam war. Privatization allowed for the debt to be taken off the govt books. It also allowed for dividends to be paid to shareholders and a focus on quaterly results raising the cost to those that borrow. In 1970 Freddie Mac was created so that there would not be a monopoly.

With the mantra Profit is Privatized and Dept is Socialized the GSEs have leveraged themselves to where their debt approximates the public dept in America. Bringing them back as a govt entity would lower interest rates for the average borrower by as much as one percent and get rid of a great deal of corruption that is systemic to the beltway.

One of the candidates is on record stating he would like to see Fan and Fred “go away” (as in receivership) and would like to see an end to their multi million dollar lobbying campaign. It would be nice if the other candidate supported reform also.