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Latest Comments14 Comments
Citigroup: Another Bad Deal
""...why, when bankers come hat-in-hand, can’t we have somebody negotiate on behalf of the taxpayers? Why does the auto industry get raked over the coals (they should be, but the double standard here is glaring) in congressional hearings, while bankers get sweetheart deals over the weekend with no scrutiny...
...the package does not leave me feeling good about the future...""
Hand-cuff these hypocrites. They sacrifice what's left of the industrial base in the US, the livelihood of millions of hardworking people, on the altar of big swinging financial dinosaurs who should be history by now. Break em up, save the orphans and widows portfolios, but let the rest go down the drain. For the future wellbeing of mankind.
Have a good day
Fannie and Freddie Did Not Cause This Crisis
(minutes in extenso tinyurl.com/3g8hmn )
Quote
H.R. 2575—THE SECONDARY
MORTGAGE MARKET ENTERPRISES
REGULATORY IMPROVEMENT ACT
Thursday, September 25, 2003
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
Mr. FRANK.
…welcome the fact that we have in Fannie Mae and Freddie Mac a means of bringing down housing costs…Fannie Mae and Freddie Mac are sufficiently secure so they are in no great danger…I don't think that we have an impending disaster….
Mr. KANJORSKI.
…We must also ensure that the GSEs continue to achieve their statutory obligation of advancing affordable housing opportunities for low-and middle-income families…
Ms. WATERS.
…we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine
…not to impede their affordable housing mission, a mission that has seen innovation flourish from desktop underwriting to 100 percent loans.
…In 2002 alone, Fannie Mae provided $279 billion in credit serving low-and moderate-income households.
…since the inception of goals from 1993 to 2002, loans to African-Americans increased 219 percent and loans to Hispanics increased 244 percent, while loans to non-minorities increased 62 percent.
I am opposed to a new bureaucracy at HUD to track sub-goals. We should focus on those banks, many of them competitors of these GSEs, who avoid CRA and practice predatory lending.
Mr. NEY.
…The United States mortgage and credit markets are the envy of the world.
…This agency has an important role in ensuring our nation is focused on providing decent and affordable housing for all Americans.
Mr. BACA
…One reason Fannie Mae has been successful is because the current status encourages them to be innovative… to be proactive in reaching out to low-income families…
…we should not interfere with GSEs ability …to meet the needs of low-income families in underserved areas
…GSE must …fulfill the responsibility of their congressional charter and housing mission.
STATEMENT OF FRANKLIN RAINES, CEO, FANNIE MAE
Mr. RAINES
Today Fannie Mae is one of only two companies in America to guarantee the nationwide flow of low-cost mortgage capital at all times, even when other suppliers of mortgage capital cannot or choose not to provide such capital.
…Fannie Mae has amassed over $30 billion of private equity capital to finance $2 trillion of mortgages today.
…In 1994, we launched our trillion-dollar commitment, a pledge to provide $1 trillion in financing for 10 million underserved families before the decade was over.
…In 2000, after we met this pledge, we launched a redoubled new pledge, our American Dream Commitment, to provide $2 trillion for 18 million underserved families before this decade is over.
…lead the market in serving minority families. We pledged to provide $420 billion to help serve 3 million minority families…Fannie Mae boosted our pledge to $700 billion
…Our senior debt of course is rated AAA.
…It is by having new programs, with low down payments, and with the ability to deal with people with impaired credit and other innovations that have really allowed us to expand affordable housing.
…we are one of the only people who will buy mortgages on Indian reservations that are governed solely by the Indian judicial system…
…every time we had a new idea, a new activity, a new product, we had to go and get prior approval, that would … slow the process down…will bring innovation within the housing finance industry to a screeching halt.
Mr. BACA.
…I particularly want to thank Frank Raines…The work you do in the Latino community is very important. Both companies have impressive track records of expanding minority home ownership…
Mr. FRANK.
I don't see any financial crisis. You can always make things better, but I do think we should dispel the notion that we are here because there is something rotten that has gone on.
Mr. RAINES. We are vitally committed to our housing mission…it is our number one priority.
…Our housing mission, however, does require us to raise capital around the world. Our investors invest in Fannie Mae not because they necessarily share our housing mission, but because they think that Fannie Mae will be a good steward of the capital.
Mr MILLER
…either considering safety and soundness or considering how to make credit available…among…racial and ethnic minorities and just low-wealth families in general.
EXECUTIVE DIRECTOR, INSTITUTE FOR OPPORTUNITY AND EQUALITY, NATIONAL URBAN LEAGUE
Mr. SPRIGGS
…the size of the securities and mortgage-backed security instruments issued by GSEs is …a little larger than the U.S. Treasury-note market. And so that means that all of us should be concerned about the safety and soundness of these enterprises, and that they are very important to the security of the American economy, if not the world's capital markets.
…However, it is equally important to remember why Congress created the GSEs…to establish increasing access to home mortgages for underserved areas, and this mission must remain paramount in assessing different measures of safety and soundness…
Unquote
Have a good day
The Presidential Speech, in Context
As a foreigner, residing abroad, but with longstanding ties to the US and admiration for the American people and the core values of this great country, taking advantage of the recent Dollar blip, I have sold my Tips. I am holding the cash equivalent in Euros, for the time being.
Why? I ve completely lost faith in anything coming out of Washington at the moment, to the point of instilling fear for the safety of what used to be part of my untouchable nest egg portfolio, Treasury Tips. And President Bush' speech yesterday made it even worse. 700 Billion or not, it does not really matter. For simpletons like me, he can utter anything he wants, trust is gone, I just do not believe this man.
Have a good day
Can the US Government Afford Future Bailouts?
I can chose between this terrible thing called depression (yuck - noooobody wants this) and no limits money print inflation. Benign, mild, you will not even notice (Aha, gimme some of this, that s more to my liking).
Well why then all this fuss about a financial market crisis, Wall Street in turmoil, bail outs? Why even issue Government debt, treasury bills, bonds, notes and the like? Why not just print money, as you go, as you need. That s what the author tells us we can do. And while we are at it – why pay taxes, why doesn’t t the Treasury just send a check to every American, every month – and we all live happily ever after?
No wonder the US is in a mess when such goofy theories are making the rounds. But then why not put the entire world on halluncinogen and off we are to financial Nirvana
And if someone doesn’t t want to buy into this idea of paradise on earth, there are still mighty military options open – with no limits, with all the resources one can dream of, paid with the no limits Government money print our author just invented.
Mind boggling!
Have a good day
Freddie/Fannie Plans In Motion; Why Are They Being Underplayed?
And he wants this metaphor to be called capitalism and free market!
For a change, why not make money the old fashioned way: Earn it. And stop begging thy neighbors all over the world. How pathetic. The American people really deserve better.
Have a good day
Wake Up America, You’re Sinking
Btw, professionally I ve spent 15 years resident in the US of A, about 10 y on missions in other parts of the world and since 15 y in Europe. So dont get me started. I may have a big surprise for you: The best and the worst can be found anywhere. Extreme examples galore. Only as far as income tax filing obligation for his citizens and green card holders is concerned, Uncle Sam is tops with his world wide reach.
I am not so sure what you mean by "European" Health Plan. Any decent employer in France, the UK, Switzerland and so forth will subscribe to extensive private coverage, valid European wide or worldwide, depending. As an individual you can also get additional coverage here www.ihi.com/ (I am not an insurance sales guy and have nothing to do with IHI)
The Dollar’s Excellent Week
So I suggest you hold your horses and get down to earth before you go all giddy about this mosquito bite size blip of Dollar x-change advance. A juicy mango the Dollar is not – for a very long time to come - unfortunately. Where are you, Paul Volcker!?!
Have a good day
Thursday Outlook: Commodities, Emerging Markets
David Fry writes
“…and, presto, money is created from rubbish! Do you then wonder why gold prices would fall and the dollar rally? I do and it gives me a headache...”
Stop wondering! In order to “keep the Dollar strong” (until further notice, just a hilarious oxymoron), it is possible that the Central Banks not only sell but short the heck out of gold.
By wasting their gold, they sacrifice also their own “strong” currencies, on the altar of the not-so-mighty dollar. Because they have still too many of them on their balance sheets. And they are mightily embarrassed. And the timing is just fine to do that in the general financial mess we are in. And some more inflation – who cares. If it gets out of hand, we ll just fix the “core” calculation formula and on we go, cheating ourselves.
Socialists playing capitalists on the back of us, the poor schleps, sometimes still with the illusion that we are living in a “free market”.
Have a good day
How the U.S. Financial Crisis Resembles Japan’s 'Lost Decade' - And How to Play it
During the so called « lost Japanese » decade, they kept on living decently, very civilized, no growing soup kitchen queues to my knowledge. They travelled the world with a strong yen, their car and other industries kept on developing world market beating products – and their personal savings staid at record level and record value – certainly compared to the de-based US Dollar.
So what is so wrong about such a « lost » decade? Give me this kind of misery anytime compared to the socialist bailout to preserve the privatize profits of some WS hacks.
As I mentioned in another post, it is definitely Beatles time (back to the US...back to the US...back to the USSR...)
have a good day
The SEC Panics
There they go, talking free market rules and regulation about an entity that is one of the worst examples of socialist subsidized fiat money mirages the so called capitalist world has ever seen.
Back to the US..., back to the US..., back to the USSR (copyright Beatles)
The Funny Freddies should go the way of rotten meat – to the trash.
Have a good day
Is Bernanke Hinting Something About the Fed's Rate Plans?
“..freely admit to very limited knowledge..”
Do not despaire - instead you have a full bag of the most precious commodity in the world: Common sense!
My mother tongue is not English but listening to Uncle Ben, his speech appears to me thinly veiled panic speak. Burning the deck chairs on the Titanic. To keep warm pending the sinking of the ship.
I never thought I utter these words but why not cutting this agony short and nationalize Wall Street? The American and other people around the world would be grateful. They will have to pay the bill anyway. And government bureaucrats can hardly do worse. And they would be far less expensive. De facto they are in charge now already. One can reprivatize later but in the meantime, this would be a formidable opportunity to do away with arsenals full of weapons of financial mass destruction in control of private armies of mercenaries, posing as “investment bankers”.
Have a good day
Did the 'Enron of Norway' Pull a Fast One on Microsoft?
When Central Bankers Clash, Stock Markets Can Crash
Further up Gabe Borenstein writes
“…the ECB had managed to weaken the dollar by about 50% vs the Euro…”
Well, why not blame it for wild fires and floods?
As far as I remember the 30 years before the ECB even existed, already the Dollar went steadily down the drain (compared to Swiss Francs, Deutschmark then Euro, Yen. It used to be worth more than 4 times as much – 40 years ago). This trend has only once been markedly interrupted: During Paul Volcker s tenure as Fed chairman, successfully combating double digit COL by limiting money supply, never mind interest rates.
Btw, if COL would be calculated as in the ole Volcker days we would already be close to double digits in the USA. Another monster con job on the American people, the “core” inflation calculation formula.
It is not rocket science what happened in the recent decades:
There was no more added value produced by the US of A Inc. Government and Consumer spending, apparent growth and wealth, was artificially created by spiraling indebtedness to the rest of the World and printing money = debasing the US $ = no more trust in the US (economy, Wall Street, political establishment) = run for alternative, non-fiat “currencies” such as oil, gold, commodities, real property when back to levels people can afford to buy for money they have really earned – not with debt and mortgaged, “equity” loaned, until the beams crack.
The opening of the Fed spigot for all and sundry garbage debts, defaults are just hideous attempts to delay the day of reckoning. I am afraid the chickens are in the process of coming home to roost. Whether by depression or hyper inflation is akin to choosing between death by hanging or drowning.
Have a good day.
PS: One more thing on oil price and “speculation”: If for political reasons and self-preservation you are “forced” to sell your wealth, your oil you produce, against worthless dollars – what do you do? Hedge the damn stuff, of course! You don’t need much to get the market the way you want – no – you need it to go, to keep some resemblance of wealth on the the books. Wonder who Nymex, CBOT, IPE/ICE s clients of their clients traders really are…?
When Central Bankers Clash, Stock Markets Can Crash