WSJ on Fannie and Freddie

[4plexowner]

Very good article from WSJ online

http://online.wsj.com/article/SB119556248413999149.html

It talks about how Treasury Sec. Paulson and Senator Schumer want to expand the GSEs to alleviate the current housing downturn. As Sen. Charles Schumer says, “The whole reason Fannie and Freddie exist is to help in times like these”.

The article then talks about the financial challenges being faced by Fannie and Freddie.

I find it interesting that Freddie is about to issue $5 billion in preferred stock – who would buy it?

[TheBreeze]

That was an eye-opening article. I didn’t realize that Fannie and Freddie own or guarantee $4.8 trillion in mortgages (40% of the total outstanding). I wish the government would get the hell out of the mortgage business. Our own government through Fannie and Freddie is a huge reason we are in this mess.

I almost LOLed when I saw that Freddie had $34 billion in capital. Assuming they own or are guaranteeing half that $4.8 trillion total, then that’s $34 billion in capital backing $2.4 trillion in mortgages. That’s a capital reserve of 1.4% of what they are backing. Ridiculous.

Freddie is also counting on only a 5% decline in housing values from the peak. I would characterize that as willful denial. Freddie and Fannie have to be two of the worst-run organizations in the world.

[kev374]

is it possible for the government to use taxpayer money to bail out a GSE? I thought GSEs are self-supporting enterprises but just managed by the government. They don’t use taxpayer money for costs.

[kev374]

is it possible for the government to use taxpayer money to bail out a GSE? I thought GSEs are self-supporting enterprises but just managed by the government. They don’t use taxpayer money for costs.

[kev374]

is it possible for the government to use taxpayer money to bail out a GSE? I thought GSEs are self-supporting enterprises but just managed by the government. They don’t use taxpayer money for costs.

[kev374]

is it possible for the government to use taxpayer money to bail out a GSE? I thought GSEs are self-supporting enterprises but just managed by the government. They don’t use taxpayer money for costs.

[kev374]

is it possible for the government to use taxpayer money to bail out a GSE? I thought GSEs are self-supporting enterprises but just managed by the government. They don’t use taxpayer money for costs.

[bsrsharma]

"counting on only a 5% decline"

I suspect that is the trigger that will initiate the chain reaction that will eventually meltdown Fannie & Freddie. Any moron can see that there will be much more than 5% decline. When Fannie & Freddie fail, the catastrophic consequences will make the current problems seem minor. If the treasury tries to intervene and help, the virus can easily jump to treasuries, causing a $ collapse. 2008 will be one scary year.

[4plexowner]

http://www.housingwire.com/2007/11/21/freddie-mac-faces-legal-heat-over-losses/

Legal actions and negative publicity against the GSEs will reduce the chances of our Congress approving an increase in loan limits or portfolio size

Voting to expand Fannie and Freddie might be seen as a potential liability in the 2008 elections so our steadfast leaders will postpone making any decision until 2009

[Ex-SD]

Schumer has always been an idiot and I could never understand how he kept getting elected and eventually ended up in the U.S. Senate. I remember when he was a congressman and attempted to introduce a bill to tax each bullet sold (I believe it was somewhere in the neighborhood of $5 a bullet). The guy is a french fry short of a happy meal so his latest antics do not surprise me.

[Ex-SD]

Schumer has always been an idiot and I could never understand how he kept getting elected and eventually ended up in the U.S. Senate. I remember when he was a congressman and attempted to introduce a bill to tax each bullet sold (I believe it was somewhere in the neighborhood of $5 a bullet). The guy is a french fry short of a happy meal so his latest antics do not surprise me.

[Ex-SD]

Schumer has always been an idiot and I could never understand how he kept getting elected and eventually ended up in the U.S. Senate. I remember when he was a congressman and attempted to introduce a bill to tax each bullet sold (I believe it was somewhere in the neighborhood of $5 a bullet). The guy is a french fry short of a happy meal so his latest antics do not surprise me.

[Ex-SD]

Schumer has always been an idiot and I could never understand how he kept getting elected and eventually ended up in the U.S. Senate. I remember when he was a congressman and attempted to introduce a bill to tax each bullet sold (I believe it was somewhere in the neighborhood of $5 a bullet). The guy is a french fry short of a happy meal so his latest antics do not surprise me.

[Ex-SD]

Schumer has always been an idiot and I could never understand how he kept getting elected and eventually ended up in the U.S. Senate. I remember when he was a congressman and attempted to introduce a bill to tax each bullet sold (I believe it was somewhere in the neighborhood of $5 a bullet). The guy is a french fry short of a happy meal so his latest antics do not surprise me.

[4plexowner]

http://www.housingwire.com/2007/11/21/freddie-mac-faces-legal-heat-over-losses/

Legal actions and negative publicity against the GSEs will reduce the chances of our Congress approving an increase in loan limits or portfolio size

Voting to expand Fannie and Freddie might be seen as a potential liability in the 2008 elections so our steadfast leaders will postpone making any decision until 2009

[4plexowner]

http://www.housingwire.com/2007/11/21/freddie-mac-faces-legal-heat-over-losses/

Legal actions and negative publicity against the GSEs will reduce the chances of our Congress approving an increase in loan limits or portfolio size

Voting to expand Fannie and Freddie might be seen as a potential liability in the 2008 elections so our steadfast leaders will postpone making any decision until 2009

[4plexowner]

http://www.housingwire.com/2007/11/21/freddie-mac-faces-legal-heat-over-losses/

Legal actions and negative publicity against the GSEs will reduce the chances of our Congress approving an increase in loan limits or portfolio size

Voting to expand Fannie and Freddie might be seen as a potential liability in the 2008 elections so our steadfast leaders will postpone making any decision until 2009

[4plexowner]

http://www.housingwire.com/2007/11/21/freddie-mac-faces-legal-heat-over-losses/

Legal actions and negative publicity against the GSEs will reduce the chances of our Congress approving an increase in loan limits or portfolio size

Voting to expand Fannie and Freddie might be seen as a potential liability in the 2008 elections so our steadfast leaders will postpone making any decision until 2009

[j]

What if the dollar collapses? Too late, it is in free fall.

Looks like that is the Fed’s plan to help the banks and pension plans. The collapse of pension plans will be a big story in the next few months (audits start in Jan). Many of those are government pension funds that tax payers will be bailing out. Most cities and States will have financial issues like San Diego had, and San Diego will get much worse.

The Governator has already called for a 10% budget cut next year.

[4plexowner]

OFHEO director James Lockhart talking about Fannie and Freddie – the OFHEO wants to take over as manager of the two GSEs
http://www.cnbc.com/id/15840232?video=597801503&play=1

Mr Lockhart says that Fannie and Freddie backed 40% of all mortgages in 2006 – by 3rd quarter 2007 they were backing 60% of all mortgages and in October they backed 70% of all mortgages – I was surprised that the GSEs have such a large presence in the world of mortgage financing

Is this dramatic growth in market share occurring because 189 mortgage lenders have stopped lending (http://ml-implode.com/) or is there something else going on as well?

[4plexowner]

OFHEO director James Lockhart talking about Fannie and Freddie – the OFHEO wants to take over as manager of the two GSEs
http://www.cnbc.com/id/15840232?video=597801503&play=1

Mr Lockhart says that Fannie and Freddie backed 40% of all mortgages in 2006 – by 3rd quarter 2007 they were backing 60% of all mortgages and in October they backed 70% of all mortgages – I was surprised that the GSEs have such a large presence in the world of mortgage financing

Is this dramatic growth in market share occurring because 189 mortgage lenders have stopped lending (http://ml-implode.com/) or is there something else going on as well?

[4plexowner]

OFHEO director James Lockhart talking about Fannie and Freddie – the OFHEO wants to take over as manager of the two GSEs
http://www.cnbc.com/id/15840232?video=597801503&play=1

Mr Lockhart says that Fannie and Freddie backed 40% of all mortgages in 2006 – by 3rd quarter 2007 they were backing 60% of all mortgages and in October they backed 70% of all mortgages – I was surprised that the GSEs have such a large presence in the world of mortgage financing

Is this dramatic growth in market share occurring because 189 mortgage lenders have stopped lending (http://ml-implode.com/) or is there something else going on as well?

[4plexowner]

OFHEO director James Lockhart talking about Fannie and Freddie – the OFHEO wants to take over as manager of the two GSEs
http://www.cnbc.com/id/15840232?video=597801503&play=1

Mr Lockhart says that Fannie and Freddie backed 40% of all mortgages in 2006 – by 3rd quarter 2007 they were backing 60% of all mortgages and in October they backed 70% of all mortgages – I was surprised that the GSEs have such a large presence in the world of mortgage financing

Is this dramatic growth in market share occurring because 189 mortgage lenders have stopped lending (http://ml-implode.com/) or is there something else going on as well?

[4plexowner]

OFHEO director James Lockhart talking about Fannie and Freddie – the OFHEO wants to take over as manager of the two GSEs
http://www.cnbc.com/id/15840232?video=597801503&play=1

Mr Lockhart says that Fannie and Freddie backed 40% of all mortgages in 2006 – by 3rd quarter 2007 they were backing 60% of all mortgages and in October they backed 70% of all mortgages – I was surprised that the GSEs have such a large presence in the world of mortgage financing

Is this dramatic growth in market share occurring because 189 mortgage lenders have stopped lending (http://ml-implode.com/) or is there something else going on as well?

[j]

What if the dollar collapses? Too late, it is in free fall.

Looks like that is the Fed’s plan to help the banks and pension plans. The collapse of pension plans will be a big story in the next few months (audits start in Jan). Many of those are government pension funds that tax payers will be bailing out. Most cities and States will have financial issues like San Diego had, and San Diego will get much worse.

The Governator has already called for a 10% budget cut next year.

[j]

What if the dollar collapses? Too late, it is in free fall.

Looks like that is the Fed’s plan to help the banks and pension plans. The collapse of pension plans will be a big story in the next few months (audits start in Jan). Many of those are government pension funds that tax payers will be bailing out. Most cities and States will have financial issues like San Diego had, and San Diego will get much worse.

The Governator has already called for a 10% budget cut next year.

[j]

What if the dollar collapses? Too late, it is in free fall.

Looks like that is the Fed’s plan to help the banks and pension plans. The collapse of pension plans will be a big story in the next few months (audits start in Jan). Many of those are government pension funds that tax payers will be bailing out. Most cities and States will have financial issues like San Diego had, and San Diego will get much worse.

The Governator has already called for a 10% budget cut next year.

[j]

What if the dollar collapses? Too late, it is in free fall.

Looks like that is the Fed’s plan to help the banks and pension plans. The collapse of pension plans will be a big story in the next few months (audits start in Jan). Many of those are government pension funds that tax payers will be bailing out. Most cities and States will have financial issues like San Diego had, and San Diego will get much worse.

The Governator has already called for a 10% budget cut next year.

[bsrsharma]

"counting on only a 5% decline"

I suspect that is the trigger that will initiate the chain reaction that will eventually meltdown Fannie & Freddie. Any moron can see that there will be much more than 5% decline. When Fannie & Freddie fail, the catastrophic consequences will make the current problems seem minor. If the treasury tries to intervene and help, the virus can easily jump to treasuries, causing a $ collapse. 2008 will be one scary year.

[bsrsharma]

"counting on only a 5% decline"

I suspect that is the trigger that will initiate the chain reaction that will eventually meltdown Fannie & Freddie. Any moron can see that there will be much more than 5% decline. When Fannie & Freddie fail, the catastrophic consequences will make the current problems seem minor. If the treasury tries to intervene and help, the virus can easily jump to treasuries, causing a $ collapse. 2008 will be one scary year.

[bsrsharma]

"counting on only a 5% decline"

I suspect that is the trigger that will initiate the chain reaction that will eventually meltdown Fannie & Freddie. Any moron can see that there will be much more than 5% decline. When Fannie & Freddie fail, the catastrophic consequences will make the current problems seem minor. If the treasury tries to intervene and help, the virus can easily jump to treasuries, causing a $ collapse. 2008 will be one scary year.

[bsrsharma]

"counting on only a 5% decline"

I suspect that is the trigger that will initiate the chain reaction that will eventually meltdown Fannie & Freddie. Any moron can see that there will be much more than 5% decline. When Fannie & Freddie fail, the catastrophic consequences will make the current problems seem minor. If the treasury tries to intervene and help, the virus can easily jump to treasuries, causing a $ collapse. 2008 will be one scary year.

[TheBreeze]

That was an eye-opening article. I didn’t realize that Fannie and Freddie own or guarantee $4.8 trillion in mortgages (40% of the total outstanding). I wish the government would get the hell out of the mortgage business. Our own government through Fannie and Freddie is a huge reason we are in this mess.

I almost LOLed when I saw that Freddie had $34 billion in capital. Assuming they own or are guaranteeing half that $4.8 trillion total, then that’s $34 billion in capital backing $2.4 trillion in mortgages. That’s a capital reserve of 1.4% of what they are backing. Ridiculous.

Freddie is also counting on only a 5% decline in housing values from the peak. I would characterize that as willful denial. Freddie and Fannie have to be two of the worst-run organizations in the world.

[TheBreeze]

That was an eye-opening article. I didn’t realize that Fannie and Freddie own or guarantee $4.8 trillion in mortgages (40% of the total outstanding). I wish the government would get the hell out of the mortgage business. Our own government through Fannie and Freddie is a huge reason we are in this mess.

I almost LOLed when I saw that Freddie had $34 billion in capital. Assuming they own or are guaranteeing half that $4.8 trillion total, then that’s $34 billion in capital backing $2.4 trillion in mortgages. That’s a capital reserve of 1.4% of what they are backing. Ridiculous.

Freddie is also counting on only a 5% decline in housing values from the peak. I would characterize that as willful denial. Freddie and Fannie have to be two of the worst-run organizations in the world.

[TheBreeze]

That was an eye-opening article. I didn’t realize that Fannie and Freddie own or guarantee $4.8 trillion in mortgages (40% of the total outstanding). I wish the government would get the hell out of the mortgage business. Our own government through Fannie and Freddie is a huge reason we are in this mess.

I almost LOLed when I saw that Freddie had $34 billion in capital. Assuming they own or are guaranteeing half that $4.8 trillion total, then that’s $34 billion in capital backing $2.4 trillion in mortgages. That’s a capital reserve of 1.4% of what they are backing. Ridiculous.

Freddie is also counting on only a 5% decline in housing values from the peak. I would characterize that as willful denial. Freddie and Fannie have to be two of the worst-run organizations in the world.

[TheBreeze]

That was an eye-opening article. I didn’t realize that Fannie and Freddie own or guarantee $4.8 trillion in mortgages (40% of the total outstanding). I wish the government would get the hell out of the mortgage business. Our own government through Fannie and Freddie is a huge reason we are in this mess.

I almost LOLed when I saw that Freddie had $34 billion in capital. Assuming they own or are guaranteeing half that $4.8 trillion total, then that’s $34 billion in capital backing $2.4 trillion in mortgages. That’s a capital reserve of 1.4% of what they are backing. Ridiculous.

Freddie is also counting on only a 5% decline in housing values from the peak. I would characterize that as willful denial. Freddie and Fannie have to be two of the worst-run organizations in the world.

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