Buffett - "Game is over" for Fannie, Freddie

[Cutten]

Fannie and Freddie "don't have any net worth" according to the billionaire investor from Omaha

http://www.bloomberg.com/apps/news?pid=20601087&sid=aooA6DOXavYw&refer=home

``The game is over'' as independent companies said Buffett, the 77-year-old chairman of Berkshire Hathaway Inc., in an interview on CNBC today. ``They were able to borrow without any of the normal restraints. They had a blank check from the federal government.''

 

[sho-tim]

He was instructed to wait for the new short sale rules before he said that.

 

[Thermactor]

The game is over as independent companies. So, what will happen now? They'll be taken over by the Federal Government, liquidated, leaving commons with nothing.

 

[bbqbbq]

Maybe he shorted FRE and FNM? Even if what he said was true, his words have quite the impact on the herd.:eek:

 

[RiceRocket]

They are not going to wipe the common. This is a big head fake ploy by the media to keep moral hazard down. They don't want the retail investors to think they will get bailed out. But ultimately it is not going to happen. The financial system is just too weak for this to happen right now. Maybe a year or two down the road we will see them get wiped, but not now.
You should probably start listening to the fed governors in interviews and speeches to see what's really going to happen. It's the same bullshit the media keeps touting about interest rate hikes. Like they would want to shock the system at its weakest point.

 

[m22au]

Suppose that the Treasury and/or OFHEO insist that FRE raises $5.5 billion from private investors, or else the Treasury will provide that much equity, on their dilutive terms (eg. super senior preferred stock, 25% dividend).

The stock price of FRE may not fall to zero, but it might be well below $1.

Quote from RiceRocket:

They are not going to wipe the common. This is a big head fake ploy by the media to keep moral hazard down. They don't want the retail investors to think they will get bailed out. But ultimately it is not going to happen. The financial system is just too weak for this to happen right now. Maybe a year or two down the road we will see them get wiped, but not now.
You should probably start listening to the fed governors in interviews and speeches to see what's really going to happen. It's the same bullshit the media keeps touting about interest rate hikes. Like they would want to shock the system at its weakest point.

 

[piezoe]

Quote from RiceRocket:

They are not going to wipe the common. This is a big head fake ploy by the media to keep moral hazard down. They don't want the retail investors to think they will get bailed out. But ultimately it is not going to happen. The financial system is just too weak for this to happen right now. Maybe a year or two down the road we will see them get wiped, but not now.
You should probably start listening to the fed governors in interviews and speeches to see what's really going to happen. It's the same bullshit the media keeps touting about interest rate hikes. Like they would want to shock the system at its weakest point.

Right on, Rocket.