Pimco's Gross Says U.S. Will Rescue Fannie, Freddie
- Thread starter Daal
- Start date
limit down in index futures....
why? because of complacency...in pain.
why? because of complacency...in pain.
Quote from Steelhead:
comon man when you say limit down, it means limit down now,
today---- after hours right?
afterhours the liquidity is low enough that 'painting' sentiment for the following day occurs...
its a mutually agreed thing to do by the big trading houses, so most everyone else who decides to catch knifes, have to exit the market at lower levels creating liquidity of offsets for the major players...
will it happen tonight,..?
there is 20% chance.
a failure.... 1200 retest..
Fannie, Freddie shares battered
Fannie stock falls 22% and Freddie 25% to near two-decade lows. Media report suggests the Bush administration doubts mortgage giant firms will be able to raise needed capital
http://money.cnn.com/2008/08/18/news/companies/fannie_freddie/?postversion=2008081818
Fannie stock falls 22% and Freddie 25% to near two-decade lows. Media report suggests the Bush administration doubts mortgage giant firms will be able to raise needed capital
http://money.cnn.com/2008/08/18/news/companies/fannie_freddie/?postversion=2008081818
In February 2004, the Chairman of the Federal Reserve, Alan Greenspan, testified before the Senate Committee on Banking, Housing, and Urban Affairs:
Because Fannie and Freddie can borrow at a subsidized rate, they have been able to pay higher prices to originators for their mortgages than can potential competitors and to gradually but inexorably take over the market for conforming mortgages. This process has provided Fannie and Freddie with a powerful vehicle and incentive for achieving extremely rapid growth of their balance sheets. The resultant scale gives Fannie and Freddie additional advantages that potential private-sector competitors cannot overcome. Importantly, the scale itself has reinforced investors' perceptions that, in the event of a crisis involving Fannie and Freddie, policymakers would have little alternative than to have the taxpayers explicitly stand behind the GSE debt. This view is widespread in the marketplace despite the privatization of Fannie and Freddie and their control by private shareholders, because these institutions continue to have government missions, a line of credit with the Treasury, and other government benefits, which confer upon them a special status in the eyes of many investors.
Because Fannie and Freddie can borrow at a subsidized rate, they have been able to pay higher prices to originators for their mortgages than can potential competitors and to gradually but inexorably take over the market for conforming mortgages. This process has provided Fannie and Freddie with a powerful vehicle and incentive for achieving extremely rapid growth of their balance sheets. The resultant scale gives Fannie and Freddie additional advantages that potential private-sector competitors cannot overcome. Importantly, the scale itself has reinforced investors' perceptions that, in the event of a crisis involving Fannie and Freddie, policymakers would have little alternative than to have the taxpayers explicitly stand behind the GSE debt. This view is widespread in the marketplace despite the privatization of Fannie and Freddie and their control by private shareholders, because these institutions continue to have government missions, a line of credit with the Treasury, and other government benefits, which confer upon them a special status in the eyes of many investors.
Fannie Mae: Another New Deal Monstrosity
Daily Article by Karen De Coster and Eric Englund | Posted on 7/2/2007
http://mises.org/story/2627
....... A strategic cog in the monetary transmission mechanism is Fannie Mae. In the four-year period from 2000 to 2003, Fannie Mae's outstanding Mortgage-Backed Securities grew from $706.7 billion to an astounding $1.3 trillion. Moreover, its mortgage portfolio ballooned from $607.7 billion to $901.8 billion. With Fannie Mae financing one in every five home loans in the United States, didn't it ever occur to the Federal Reserve that it should look into this financial institution's accounting, management control, and credit quality systems? If this massive transmitter of money â Fannie Mae â was not up to the task of responsibly lending such vast quantities of money into existence, did it not occur to the Federal Reserve that it may have to clean up the mess it had a hand in making? Does the Federal Reserve have a plan to bail out the second largest financial institution in the United States?..........
Daily Article by Karen De Coster and Eric Englund | Posted on 7/2/2007
http://mises.org/story/2627
....... A strategic cog in the monetary transmission mechanism is Fannie Mae. In the four-year period from 2000 to 2003, Fannie Mae's outstanding Mortgage-Backed Securities grew from $706.7 billion to an astounding $1.3 trillion. Moreover, its mortgage portfolio ballooned from $607.7 billion to $901.8 billion. With Fannie Mae financing one in every five home loans in the United States, didn't it ever occur to the Federal Reserve that it should look into this financial institution's accounting, management control, and credit quality systems? If this massive transmitter of money â Fannie Mae â was not up to the task of responsibly lending such vast quantities of money into existence, did it not occur to the Federal Reserve that it may have to clean up the mess it had a hand in making? Does the Federal Reserve have a plan to bail out the second largest financial institution in the United States?..........