Fannie/Freddie Doomsday

[Financially Feasible]

The latest in sobering news surrounding the financial community...

http://money.cnn.com/2008/07/09/new...ddie.fortune/index.htm?postversion=2008070914

I found this quote to be particularly distubring:

The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States.

 

[Joanne Rauenzahn]

Do you know how much more fannie and freddie are charging now? Surely that has to help them. Right off the top there is a 1/4% delivery fee - then if you don't have a 720 score expect to pay from 1 point or MORE depending on the LTV. This HAS to be helping the bottom line!

 

[Mark to market]

The latest in sobering news surrounding the financial community...

:

Yeah, but think of all the money they saved by using AVMs

 

[Karl]

Yeah, but think of all the money they saved by using AVMs

Worse than that!!! Think how many BAD Appraisals they have, at least with a paper trail they have someone to blame!! More Indictments coming soon!!!!!!!!

 

[Terrel L. Shields]

could force the agency to lower its rating on the creditworthiness of the United States.

can we say "moral hazard"...watched Cspan and testimony before Barney Frank by Paulson and Bernanke...idiot savants...I hope Bernanke is a one term Fed chair...Paulson, thankfully, will be gone soon.

 

[Riick]

Is the "Vampire let loose at the bloodbank" still alive ?

Where is Paul Volker when we need him (again) ???

LINK Paul Volcker, was Chairman of the Federal Reserve appointed August 1979 by President Jimmy Carter and then by President Ronald Reagan.
Volcker's Fed is credited with ending the United States' stagflation crisis of the 1970s by limiting the growth of the money supply, abandoning the previous policy of targeting interest rates.
Inflation, which peaked at 13.5% in 1981, was lowered to 3.2% by 1983.

 

[Pamela Crowley (Florida)]

http://www.webofdebt.com/articles/banking-bailout.php

?

 

[The Warrior Monk]

The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States.

Eventually the creditworthiness will be lowered, be it by this or some other future event. A country cannot borrow it's way into prosperity in perpetuity. If you think $1,000,000,000,000 is a lot of money, compare it to the interest paid on the deficit, the Iraq war, or the cost of government programs such as Social Security, where it is a given that future obligations cannot be met.

 

[Couch Potato]

Talk now is about raising the top tax rate to 45% to help cover the cost.

Senator Dodd says Fannie and Freddie have adequate reserves, but then qualifies it with 'under federal law' as the measuring stick rather than 'for their needs.'

 

[The Warrior Monk]

Talk now is about raising the top tax rate to 45% to help cover the cost.

The problem is, raise the rate high enough, and the wealthy will choose to do business elsewhere. Given that they pay the bulk of the taxes in this country, that is a serious concern.