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Fannie, Freddie Overhaul Could Cost $685 Billion

Prof. Peabody

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NOVEMBER 4, 2010, 8:48 P.M. ET

Fannie, Freddie Overhaul Could Cost $685 Billion

By NICK TIMIRAOS

The total cost to rescue and then overhaul mortgage giants Fannie Mae and Freddie Mac could reach $685 billion, according to estimates published Thursday by Standard & Poor's.

Fannie and Freddie have already cost taxpayers nearly $134 billion, but S&P analysts said Thursday that the government could ultimately be forced to inject $280 billion into the firms because of a slowdown in the housing market.

Any entities that might replace Fannie and Freddie would need new start-up funding that would go beyond the money already committed.

A consensus of academics, industry officials and investors has coalesced around the idea of using the government to provide explicit guarantees for securities backed by mortgages that meet certain standards. Tough questions loom over how those guarantees would be structured and priced and what entities would provide them.

Fannie, Freddie Overhaul Could Cost $685 Billion - WSJ.com
The Democrats were warned again and again about the trouble brewing at Fannie and Freddie, especially after they were caught cooking the books so the execs could get the biggest bonuses they could.


Pay special attention to Barney Frank at the 1:30 mark and on. He said he see no problem with Fannie and Freddie and even if there were, we don't bail 'em out.


Here they are in late 2004 defending Fannie and Freddie insisting nothing was wrong. History have proven them SO very wrong. The taxpayers may be on the hook for $280 Billion Dollars when all the warning signs were there years before the crash when something could have been done about it.

This was a headline in the NY Times in 2003.

Fannie Mae's Loss Risk Is Larger, Computer Models Show - New York Times

Fannie and Freddie were even absent of oversight in the Democrats Financial reform bill they passed. This leave the door open and the taxpayers on the hook for future bailouts of F&F.
 
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Lord Tammerlain

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So why didnt the Republican president, republican congress, republican senate do something about it?

Sorry I forgot about the all powerfull supreme being Barney "Superman" Franks, the single most powerfull man in the world,
 

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obama's wall street regulatory reform, his #3 domestic priority (#2, cap and trade, died in the senate and took quite a few house dems with it), EXEMPTS fannie and fred

Wall Street Reform: A Summary of What's In the Bill - Political Hotsheet - CBS News

housing, which more than anything else brought us all here, is still no basement in sight, millions more foreclosures coming

and HALF THOSE OBAMA BAILED OUT thru hamp have ALREADY REDEFAULTED

Half of U.S. Home Loan Modifications Default Again (Update1) - Bloomberg

no wonder germany's g20 rep, referring to bernanke's HALF TRILLION DOLLAR infusion announced this week, called us policy "clueless"

from politics to foreign policy to economics, this white house has no idea what it's doing

all but the fringe recognize

party on, purblind
 

Lord Tammerlain

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obama's wall street regulatory reform, his #3 domestic priority (#2, cap and trade, died in the senate and took quite a few house dems with it), EXEMPTS fannie and fred

Wall Street Reform: A Summary of What's In the Bill - Political Hotsheet - CBS News

housing, which more than anything else brought us all here, is still no basement in sight, millions more foreclosures coming

and HALF THOSE OBAMA BAILED OUT thru hamp have ALREADY REDEFAULTED

Half of U.S. Home Loan Modifications Default Again (Update1) - Bloomberg

no wonder germany's g20 rep, referring to bernanke's HALF TRILLION DOLLAR infusion announced this week, called us policy "clueless"

from politics to foreign policy to economics, this white house has no idea what it's doing

all but the fringe recognize

party on, purblind
Just to note

The Fed generally makes its policy independant of the government. If the Fed is truely independant as it is supposed to be the Obama admin had very little to do with Bernake deciding to do the QE2
 

The Prof

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tell it to the germans, chinese, brazilians, thais, south africans...

My Way News - Fed bond move spurs backlash from Asia to Europe

FT.com / China - China tees up G20 showdown with US

Obama Faces Chillier Reception Abroad - WSJ.com

Two years ago in London, Mr. Obama and his economic team were greeted at the G-20 summit as something akin to rock stars. At the G-20 in Seoul next week, "they're not going to have a lot of allies," said Alan Auerbach, an economist at the University of California, Berkeley, who has close ties to the White House.

On some economic issues, the trip will play out as Mr. Obama against the world, with the U.S. president as one of the last adherents to Keynesian economic policies, which promote the use of deficit spending and tax cuts to spur economic growth.
 
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Deuce

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Prof, if Cap and Trade was #2 priority, why did financial reform go through first?
 

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Guess who Barney will point at to foot the bill for this.

 

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Why are they they first to purchase our debt the second demand for their exports falls by the waistside? I mean, it would seem as though import growth here in the US has a direct, negative, correlation to the relative value of the dollar. Or am i missing something?
 

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The Democrats were warned again and again about the trouble brewing at Fannie and Freddie, especially after they were caught cooking the books so the execs could get the biggest bonuses they could.


Pay special attention to Barney Frank at the 1:30 mark and on. He said he see no problem with Fannie and Freddie and even if there were, we don't bail 'em out.


Here they are in late 2004 defending Fannie and Freddie insisting nothing was wrong. History have proven them SO very wrong. The taxpayers may be on the hook for $280 Billion Dollars when all the warning signs were there years before the crash when something could have been done about it.

This was a headline in the NY Times in 2003.

Fannie Mae's Loss Risk Is Larger, Computer Models Show - New York Times

Fannie and Freddie were even absent of oversight in the Democrats Financial reform bill they passed. This leave the door open and the taxpayers on the hook for future bailouts of F&F.
And this is somehow different than if the Republicans were in charge? I'm sure I was on the hook for a lot of those bailouts and crap. Republocrats all want the same thing, protection of the status quo and the aristocracy; even at the cost of the People.
 

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if Cap and Trade was #2 priority, why did financial reform go through first?
it was probably nancy's biggest mistake that she crammed cap and trade thru lower house BEFORE starting health care

you recall the energy bill passed the house by one vote in june of 09

it then was never picked up in the senate cuz too many upstairs dems just couldn't touch it

the leaders of NO in upper parliament, i recall, were WHIP durbin, sherrod brown of ohio, ag chair blanche lincoln and stiffneck nelson from nebraska (don't be surprised if nelson suddenly switches parties in the next few months, either that or he'll announce his retirement)

U.S. Senate Democrats skeptical about climate bill | Reuters

early word (which does merit following) also has russ feingold mounting an anti war primary challenge vs the president, the highly principled progressive from wisconsin closed his concession speech with something like, "looking forward to 2012..."

fyi
 
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Eighty Deuce

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So why didnt the Republican president, republican congress, republican senate do something about it?

Sorry I forgot about the all powerfull supreme being Barney "Superman" Franks, the single most powerfull man in the world,
That is a very legitimate question, and one which highlights the lack of leadership by Bush on many things. The simple answer is the 60 vote threshold in the Senate. But that is not what kept GB from stopping this debacle. Like so many, he did not see it coming before it was too late. As he was Pubah #1, with the most resources, that is not much of an excuse. This entire mess was a joint effort by all in power, going back to Clinton and Cuoma and pals, and extending through Bush and then the Reid-Pelosi Congress in 2007. It was government sticking its ass into capitalism. And we all got $hit on.
 

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The Prof

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again, you'd have to ask them

meanwhile, those from whom you seek clarification have some questions of their own

At issue is a U.S.-led proposal to prohibit currency manipulation of the kind that U.S. officials say China uses to give its exports an unfair advantage over U.S. made products.

Doesn’t it “look hypocritical,” Obama was asked at the news conference, to make that demand after the United States last week announced a $600 billion plan to boost U.S. economic growth that will have the effect of driving down the value of the dollar?
Barack Obama can?t escape economic debate - John Maggs - POLITICO.com
 
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I just want to note that the SECOND this gets full approval the price tag will skyrocket... probably 3-10 times, or 750billion-1.5 trillion.
Much like the original 'bailout' was made under threat of martial law and was for '800 billion' when the last time numbers were reported was averaging close to 1.5trillion per month... enough to buy out every home in north america cash upfront... for a total of 27 trillion in promises...

I know this is "conspiracy zone" talk, but it's been discussed for a LONG TIME that there would be a devaluation of the dollar and ending the dollar as the reserve currency so that all currencies could be 'amalgamated' into a global currency system of some sort (current proposals are the bankor or the SDR's)
Bancor - Wikipedia, the free encyclopedia
Currency units per SDR for May 2008

Not to mention this is only a SMALL FRACTION of the criminality of the big 6 super-banks....
 
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Kushinator

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again, you'd have to ask them

meanwhile, those from whom you seek clarification have some questions of their own
I'm not talkintg to them; i have asked you twice. How can the US maintain a stable currency when we have a current account balance greater than $300,000,000,000? The Fed has yet to intervene in the forex market, so the manipulation nonsense is off base.
 

Prof. Peabody

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So why didnt the Republican president, republican congress, republican senate do something about it?

Sorry I forgot about the all powerfull supreme being Barney "Superman" Franks, the single most powerfull man in the world,
They did, but they didn't have the super majority the Democrats had in 2009. The Democrats blocked all efforts to regulate F&F. Even in their new financial reform bill they bragged about Fannie and Freddie were excluded from regulation.
 

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And this is somehow different than if the Republicans were in charge? I'm sure I was on the hook for a lot of those bailouts and crap. Republocrats all want the same thing, protection of the status quo and the aristocracy; even at the cost of the People.
You're off the reservation. Who would you put in charge?
 

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So why didnt the Republican president, republican congress, republican senate do something about it?

Sorry I forgot about the all powerfull supreme being Barney "Superman" Franks, the single most powerfull man in the world,
Ever heard of filibuster. Bush did not have a filibuster proof senate like Obama had
 

ptif219

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I'm not talkintg to them; i have asked you twice. How can the US maintain a stable currency when we have a current account balance greater than $300,000,000,000? The Fed has yet to intervene in the forex market, so the manipulation nonsense is off base.
As long as Obama keeps increasing the deficit and keeps printing money we can't.
 

Lord Tammerlain

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Ever heard of filibuster. Bush did not have a filibuster proof senate like Obama had
No doubt, but that does not explain why Republicans blame Barney Frank for Frannie and Freddi Mac does it. He was and is in CONGRESS not the senate.
 

Kushinator

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As long as Obama keeps increasing the deficit and keeps printing money we can't.
First off, the President does not control monetary policy. Secondly, on a fundamental level, China's RYB is completely undervalued given their $2 trillion of reserves sitting in the Bank of China.

Nations in which we have a large current account deficit should, on the basis of balance of payment fundamentals, expect the dollar to continue to devalue.

We buy more from our trading partners than we sell, leaving them to hold $485,000,000,000 in dollars at the end of the day. What do they do with these dollars? Purchase dollar denominated assets such as US Treasury securities (virtually risk free), oil, AAA rated private debt, etc....

A devaluing currency is response to a continued negative current account balance. Of course there will be short term fluctuations due to the speculative nature of forex traders. But in the long run, a stronger US economy will push the dollar forward.

So the question is: Do we allow our currency to appreciate by purchasing less foreign goods? Something tells me they wouldn't be happy about that either. This is not a partisan issue; you should be happy we are finally standing up to the world (who depends on us to purchase their goods).
 
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