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Nofsdad
Joined: 06 Jul 2003
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Location: Central CA
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bc5yr
Joined: 24 Feb 2005
Posts: 457
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bc5yr
Joined: 24 Feb 2005
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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Fri Jul 11, 2008 7:30 pm Post subject:
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All of these GSEs... and other privatization endeavors from The aforementioned to Amtrak, the Federal Reserve and even the USPS, have been miserable failures when it comes to protecting the general public from inflationary price spirals and emergent economic meltdowns.
All any of them wind up amounting to are government sponsored monopolies who make up for their inability to compete in an open market with government subsidies provided by the taxpayers and elimination of any requirement TO compete.
We need to either have the government take these services back over and start running them outright or leave the services being provided solely to the private companies with no financial assistance from the taxpayers so that for the first time since most of them were created, actual competition and true market forces can have an effect on the situation. This hybrid BS does nothing but put TWO sets of hands in the pockets of the taxpayers.
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bc5yr
Joined: 24 Feb 2005
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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Sat Jul 12, 2008 3:09 am Post subject:
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Good pull BC. I've used Mr. Roubini's stuff here before only to have it ridiculed by people who think silly little one liner sound bites trump knowledge, experience and the ability to do a little simple research.
He's been right on the money in just about every prediction he's ever made in regard to the economy but for some reason he just can't seem to make himself heard over the spokespeople for the Bill O'Reilly/Rush Limbaugh School of Advanced Economic Studies.
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bc5yr
Joined: 24 Feb 2005
Posts: 457
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Posted: Sat Jul 12, 2008 3:20 am Post subject:
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I guess at this point it's really not gonna matter what us little peons think., the ball is rolling down hill and it's getting way to far ahead of us.
The pundits can say all they want., still not gonna stop that ball.
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FLlifer
Joined: 16 Feb 2005
Posts: 102
Location: FL Florida
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Posted: Sat Jul 12, 2008 7:42 pm Post subject:
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lets see... Backstop (bailout) Fannie and Freddy and DISTROY the dollar even more, or let them fail and have Thousands of small and regional level bank fail. WE loose no matter which way they move. My guess is the bought and paid for politicians will bail out their banker boss. That Barr guy is looking better every day. By the way, Indymac taken over by the FDIC, It's just starting folks.
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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Sun Jul 13, 2008 1:42 pm Post subject:
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I don't usually quote myself here but...
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| Nah... we'll bail their worthless asses out with more devalued dollars because they're a couple of those "too big to fail" Pieces of $hit but it does say something about "government sponsored enterprises" and by extension, privatization in general. |
Here's the latest from 24/7 Wall Street:
US May Put $15 Billion Into Fannie Mae And Freddie Mac
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In an attempt to save Fannie Mae (FNM) and Freddie Mac (FRE) from becoming insolvent, the US Treasury is reviewing a plan to put $15 billion in new capital into the companies.
According to The Times, "The capital-injection plan is said to be high on a list of options being considered by regulators as a means of restoring confidence in the lenders." |
More "injections of liquidity", eh? Wasn't that the phony crap they tried to deed us the first time around on the Bear story?
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| The plan would involve money which ultimately comes from US taxpayers, but shareholders in the two firms would be nearly wiped out. |
Looks like we have a new bubble forming... the "It's not enough to screw everybody else in sight, now let's screw the shareholders" bubble. If you'll remember, this was what finally brought ENRON down. The shareholders were perfectly happy with ENRON until Kenny Boy and Jeff started screwing THEM.
I have no fricking sympathy for institutional shareholders and would actually agree with Paulson on this particular aspect:
Paulson Insists Fannie, Freddie Holders Lose. Hell, they can always become oil futures speculators, eh?
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If the two companies fail, the mortgage markets could fall into tremendous disarray causing more write-offs at banks and making home loans much harder to get
On that basis, the bail-out is cheap. |
It would have been a damned site cheaper not to have let them get us INTO the damned mess in first place, don't you think?
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bc5yr
Joined: 24 Feb 2005
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Nofsdad
Joined: 06 Jul 2003
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Location: Central CA
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Posted: Mon Jul 14, 2008 2:30 pm Post subject:
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July 14 (Bloomberg) -- The U.S. Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and the largest U.S. mortgage lenders are ``basically insolvent,'' according to investor Jim Rogers.
Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson's request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. The chairman of Rogers Holdings, who in 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, also said the commodities bull market has a ``long way to go.''
Fannie Mae and Freddie Mac each surged more than 20 percent in pre-market trading today after Paulson moved to stem a collapse in confidence in the two companies that purchase or finance almost half of the $12 trillion in U.S. home loans.
``These companies were going to go bankrupt if they hadn't stepped in to do something, and they should've gone bankrupt,'' Rogers, 65, said from Singapore.
Freddie Mac rose $1.75 to $9.50 as of 8:30 a.m. in New York, while Fannie Mae added $2.30 to $12.55. Paulson's proposal, which the Treasury anticipates will be incorporated into an existing congressional bill and approved this week, signals a shift toward an explicit guarantee of Fannie Mae and Freddie Mac debt. |
So no matter how bad they continue to %$#! up, the taxpayers will always be there to bail them out?
How many more of these institutions are lining up with their hands out for their little "liquidity" fix?
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Major Appliance
Joined: 09 Feb 2008
Posts: 1292
Location: Brand Central
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Posted: Mon Jul 14, 2008 4:02 pm Post subject:
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"too big to fail"
together, they comprise 50% of the market.
if one of the other failed, the entire financial system could crash.
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Nofsdad
Joined: 06 Jul 2003
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Location: Central CA
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Posted: Mon Jul 14, 2008 5:28 pm Post subject:
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Oh wow, thanks once again for your obviously well thought out and masterfully presented analysis of the entire situation, even if it is beginning to be a bit repetitious after having been heard so many times in the last ten years..
My response is, so what? Number 1, how did we GET to this position in the first freaking place? Somebody has worked their bloody asses off to CREATE a situation wherein to allow a fricking financial institution or two that got themselves in trouble through greed, mismanagement and/or graft and corruption to suffer the normal consequences of their own actions would supposedly bring down the entire country? Why are we in a position where the greed of 5- 10% or so of the population can ruin it for the other 90-95%?
Number 2, If what we have today is the best financial system all of the talking heads on Wall Street and in DC can come up with, maybe the damned thing NEEDS to crash and be rebuilt from freaking scratch. Wouldn't be the first time some bunch of asshole wannabe robber barons destroyed or at least severely crippled our entire economy for personal gain, now would it?
The shills keep spouting that same old bullshit over and over again with nothing but the same old lame assed simple minded shallow little talk radio mumblings to back it up. Every damned time we have to bail out some big assed corporation or quasi governmental entity that has been run into the ground by fricking crooks or at least mismanaged into near fricking oblivion, a bunch of millionaire commentators and billionaire corporate drecks pop up to trot out that same damned whine to justify getting to once again rape the fricking treasury.
At some flipping point SOMEBODY is going to have to stop simply parroting the discredited party line and actually fricking DO something to couple the fricking corporate welfare with SOME kind of damned action to ensure that they aren't around with their fricking hands out again in 2,3 or 5 years because the next "big thing" has just become the next big bust.
IN other words, you're going to have to FIX THE FREAKING PROBLEMS that are causing these situations to happen over and over again. I've asked you before... how many of these fricking bubbles do the other 299 million of us have to go through before somebody decides enough is enough? The damned 5-10-15 billion dollar bandaids, supposedly being handed out in to stem these alleged hemorrhages, are being used instead mainly just to open the next flipping bleeding wound.
You (and the FED) seem to think that there's going to be just an infinite supply of money to keep passing out to inflate bubbles for Wall Street with no visible comprehension of the concept that even the best well runs dry if you go to it too many times. In your zeal to take the side of the people doing this to the rest of us you totally flipping fail to take into account the fact that the damage THAT'S being done by these constant "bubbles" will eventually ALSO crash the "system".
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sleK
Administrator
Joined: 30 Jun 2003
Posts: 1010
Location: over yonder
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Posted: Mon Jul 14, 2008 5:52 pm Post subject:
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| if one of the other failed, the entire financial system could crash. |
Which, from a big picture perspective, might not be such a bad thing.
To echo Nofs, this appears to be yet another symptom of a systemic problem with its roots in government.
I don't pretend to understand it all yet the notion of taxpayers bailing out corporations is, if anything, a government sanctioned end-run around free-market capitalism; privatize profits - socialize costs.
Such a strategy appears to provide little value for the peeps footing the bill.
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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Mon Jul 14, 2008 6:08 pm Post subject:
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Well put. We call it "corporate socialism" in some circles. This is one of the things that the newer breed of "conservatives" that's making all the noise today also fails to comprehend... that socialism is socialism... you don't "fight" socialism or promote capitalism by making sure that those at the top have the benefits of what are blatantly nothing but socialistic programs while those at the bottom get nothing but the "privilege" of paying for them.
I'm not talking about the virtues of any one system over another here although some may be tempted to try to claim that to be the case.
I'm talking about the people in the top layers always being able to have their cake and eat it too while the rest of us are dependent on their rigged wheel for our own fortunes.
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