Patrick Bagley:



But what about Lehman and Wamu and Wachovia and AIG and Merrill and . . .

Category: Bailouts, Credit, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

17 Responses to “Freddie & Fannie”

  1. …then again, sometimes, even when you are battened down…

  2. Chief Tomahawk says:


    Don’t forget the Citi!

    They have “Thank You” points, soon to be gifted to the American taxpayer. Boo-yeah!

  3. BobC says:

    Hey! It’s Friday. Any bank closures to report?

  4. George Strickland says:

    I know of know time historically when land/real estate prices were falling long term that was also macro inflationary. I’ve been thinking for some time and my conviction grows stronger every day that we are in the beginning stages of a deflationary environment which will eventually do its best to suck as much out of all asset classes as possible. If so, what are possible investments? Thanks!

  5. George Strickland says:

    Ny stock guy,

    Ha! Perhaps they can also convince us to fight another war! Does anyone here take seriously (in a funny kind of way) that with oil, commodities, housing headed down we’re setting up perfectly for deflation not inflation. If so, should I get my tent out of the basement?

  6. mat says:

    the worldwide leader AIG value is about half of the value of the french AXA. it’s just like if microsoft was cheaper than uh, lenovo ? The end of a reign. Dinosaurs viewed by mouse as dead meat for the very first glimpse…

  7. super-anon says:

    Again, it’s worth pointing out that we never really had free markets after we got the Greenspan Put back in 1998.

    In genuinely free markets people would be held accountable for their mistakes by market forces.

    We had a government that deliberately counteracted market forces for political advantage by deliberately mispricing money whenever markets began to correct.

    There’s nothing free about that.

    People need to be careful about who and what the demonize or we’ll simply end up trying to solve the wrong set of problems.

  8. super-anon says:

    BTW I point that out because Fannie and Freddie shouldn’t be drinking “Old Free Market”; they should be drinking “Old Easy Credit”.

  9. Bruce says:

    Well, nobody on my favorite economics blog has commented about the fall in retail sales today…Maybe gasoline led?

    If so, here in East Tennessee the price of gas went from 3.58 yesterday to 4.09 today, and some stations are limiting you to 30 bucks worth.

    I see that the Texas refineries, if without power, could be several weeks getting back up…does anyone else see this as a potential problem for the economy?

    Bruce in Tennessee

  10. Jeff M. says:

    @Bruce in Tennessee: But Cramer says that consumers will take their “savings” from reduced gas prices and go on a binge at the mall for Christmas-time, bringing back the retailers and the economy. Does he really believe that? If so, he’s living in fantasy-land.

  11. JL says:

    Bruce, Atlanta prices are also seeing spikes in the price of gas but not quite as high as yours. When you check on Houston prices, it tells a different story. The overnight increase in Houston went from $3.43 to $3.48. The refineries should be able to withstand this. I lived in the Beaumont/Port Arthur area for a few years.

  12. JL says:

    Bruce, I should add the words that I hope the refineries can survive this. Port Arthur could see a large amount of damage; since it is a very poor area, I worry about the loss of life.

  13. natok says:

    I hope there is no loss of life, but if the storm wreaks massive damage it will give the spinmeisters an excuse for the slowing economy.

    Isn’t it odd how almost EVERY positive data point is pointed to as a bottom, only to be revised lower in the coming months? Does anyone else notice this pattern?

    “Bloomberg reports STRONG retail sales numbers that exceeded expectations. The markets are up on this news.”

    Fast forward weeks later…..The current months data is rosy again…but they have to revise downward their previously rosy forecasts. I call it THE SPIN CYCLE.

    Also, what exactly has the consumer so rosy that the MICHIGAN survey has exploded positive? Is $.50 off per a gallon of gas all it takes to make every rosy about the future? What about the job losses? Rising basic material costs (DOW, BASF, even P&G)?

    Or were the pollsters told we needed good data to report to the masses to lift there mood. It truly feels Orwellian/JEdi.

    Paulson says the banking system is safe as he waves his hand. All Americans repeat, the banking system is safe.

    Kudlow calls a bottom and waves his hand. All Americans say…what an @sshat!

  14. SeamusAndrewMurphy says:

    Hey there super-anon, it isn’t just the Fed that FUBARs free markets. Just the existence of K street proves that free markets don’t exist.

    They are there for one reason and one reason only: to gain advantage by legislation that will distort the market in a way optimum for them. And there is a vast advantage to any entity that can legislate any proportion of their profits.

    How about the tax code? Subsidies anyone? States waiving tax liabilities in a race to the bottom? The ideological decisions of IRS tax enforcement?

    Or on a global level; environmental/labor/currency arbitrage, all due to absolute advantage, none having anything to do with “the invisible hand”.

    Ain’t just the Fed that caused the sickness. The entire system is in need of overhaul. I don’t read or hear anyone claiming such though.


  15. Mike in NOLa says:

    Mike in NOLa reporting from Houston. I saw on the news that prices had spiked here, but I had filled up my tanks a few days ago. I didn’t notice anything above $3.60 in the areas I frequent near the medical center and reliant stadium.

    If you want to see local streaming video, go to KHOU

    Not much going on here in Houston proper yet. Not even rain. I am now occaisionally hearing some wind whistling, but it’s momentary so far. OTOH hand, S.E. Louisiana has been having tropical storm weather all day along with coastal flooding from high tides.

    IMHO, I think that the oil companies took the lessons of Katrina to heart and have prepared much better, e.g. note the lack of problems from Gustave, which was a comparable strength storm that went through a fairly dense area of oil platforms. The main problems will likely be tidal surge, which is expected to be more severe than the strength of ike indicates, and power outages. There are some big refineries down near Galveston and that is catching a lot of water. I assume they have decent levees. There are about 200,000+ without power already and it hasn’t hit the coast yet. Don’t know how dependent the refineries are on outside power, but their employees sure are. There will be lots of poles and trees down and consquent disruption of operations and delivery. I expect those will be back to normal in a week.

  16. DeDude says:

    It seems pretty irrelevant whether we have ever had true purist “free markets” or not. The problems we have now obviously come from the market players having been without sufficient adult supervision and had way too much freedom to fxxk things up. Only a fool would suggest that the solution would be to give the markets more freedom.