Source: Yahoo Finance

Source Yahoo

Category: Media, Taxes and Policy, Video

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.

9 Responses to “The Latest Dumb Proposal on Fannie & Freddie”

  1. louis says:

    But how do we keep cheeseburger eating bond traders from whatever we create?

    • bsnceo says:

      Is it the act of trading MBS bonds that offends you or who it is that trades the bonds? Personally, I am more concerned about getting people to buy and then borrow money to finance what they bought. That requires more potential home buyers making more money, buying houses and borrowing (sensibly) to finance the purchase.

  2. Willy2 says:

    Starting around 1973 Fannie & Freddie were also a conduit for peddling MBS paper to foreigners. Is this a recognition of the US government that this ponzi scheme is “dead in the water” i.e. foreigners no longer have appetite for this “toxic waste” ?

    • Futuredome says:

      MBS is dead as a debt instrument. That means the rentier economy will find new outlets in debt as debt and buying of debt in capital distribution. Foreigners will look for new debt instruments to buy, to satisfy demand.

      In rentier capitalism, debt becomes very critical to market and peddle because income is diverted from labor to the rentier, creating demand shortfalls only debt can bridge.

      • Willy2 says:

        No, according to my info foreigners are actually searching for the exit when it comes to US debt instruments.

  3. willid3 says:

    not really sure why free marketers think that banks want to have a 30 year note. back before F&F they didnt want more than 10 year notes, which only extended because they could be rolled over. and that was a long time ago when banks were ok (sort of) with having longer term debt. today they really dont want much beyond 5 years. maybe on a good day. and this ‘proposal’ doesnt really get the government out at all, it just changes the chairs on the Titanic. at best. which seems to defeat the ‘purpose’ from thise wanting F&F to go away

  4. jbegan says:

    As soon as I read this headline from the LA Times; “Key senators agree on plan to replace Fannie Mae, Freddie Mac”, I had to go back and check what I knew I read a couple of weeks ago:

    Fannie Mae-Freddie Mac bailout now profitable for taxpayers – Feb. 21, 2014 http://money.cnn.com/2014/02/21/news/economy/fannie-profit-bailout/

    We’ve not only recouped all of the bailout, but have actually made money. Another article I read suggested that if we keep control of both organizations, we stand to ‘earn’ $190 Billion within 10 years.

    What is scary, is that these 2 institutions handle about 90% (if I recall) of all home loans. Shutting the doors on them and depending upon the open market to fund home loans, IMO, will create havoc in teh slowly recovering home market, which will not only impact lenders and residential builders, but could adversely affect present home values again. Is this some type of plot to destroy the only real equity that most Americans have? It would certainly seem so.

    If they intend to travel down this untested path, I’d suggest doing so in a long and gradual segue.

  5. DeDude says:

    Housing is a huge part of the economy. If housing go bust government has no choice but to bail it out – the alternative of a full-blown depression is way to expensive even compared to the worst bailout solutions. The question is how deep government should get involved to prevent the scorpions of the Bankster industry from screwing up housing (in their never ending quest for sucking money out of the productive part of the economy). We know that in the end those who will hold the bag are not those who created and profited from the problem (I mean how bad is Mozilo hurting right now?). Fannie and Freddie as originally constructed were the best idea ever on how to manage the housing sector and make it as little a threat to the economy as you possible could. The problems began when they were privatized and turned into for profit organizations. Any sector that is run for profit will eventually be exclusively about making short term profits by screwing costumers, shareholders, and society as much as the law and regulations allow.

  6. DeDude says:

    The old model for housing before the banksters were allowed in on it was just fine. People who wanted to own a home would come up with 20% as a down-payment, then get a loan for the rest of it. Combining the substantial amount of free value created by this down-payment, with prudent rules for how much money you could borrow towards a house (relative to your income and living expenses); created an incredibly stable system. The final icing on the cake was a government backstop that made the bonds from these entities as safe as FDIC insured bank deposits.

    So society got a super safe investment option for those needing it. It rewarded people who could save for a down-payment with access to low interest loans. Finally we had a housing sector that was stable and protected from the reckless greed and grabby hands of Wall Street banksters. Who could possibly object to that? – - Oh yeah I know!