Posts filed under “Bailouts”
And the Nikkei 225 opened up +306.91 that’s plus +2.5% to 12,519.14 as of 9/8 9:15am Tokyo time.
I love the headlines that accompany this: Asian Stocks, U.S. Futures Rally on Fannie, Freddie Takeover Yeah! We’re all Socialists now!
Here’s your open thread for the night: How much of this bailout was calculated not at "Systemic Risk," but instead at Asset Depreciation, i.e, falling stock prices?
Does tomorrow’s gap up hold? Or, is this like all of the previous weekend rescues — rally, failure, new low?
The floor is yours . . . What say ye?
So much for a relaxing weekend! We spilled plenty of pixels on Fannie (FNM) & Freddie (FRE)this weekend, as did lots of other folks. What follows is all of the relevant commentary I could scratch together:
Here’s TBP recap:
• Fannie & Freddie Bailout: In terms of Conservatorship, Management, Shareholders, Mortgages, Legislation, Foreign Holders, Financial sector, Politics, Timing, & GSE Insolvency
All of the Treasury, Federal Reserve and FDIC news releases:
Treasury Department Reports (PDFs):
- FHFA Director Lockhart Remarks on Housing GSE Actions
- Fact Sheet: FHFA Conservatorship
- Fact Sheet: Treasury Preferred Stock Purchase Agreement
- Fact Sheet: Treasury MBS Purchase Program
- Fact Sheet: Treasury GSE Credit Facility
- Freddie Mac Warrant to Purchase Common Stock
- Freddie Mac Certificate
- Freddie Mac Senior Preferred Stock Purchase Agreement
- Fannie Mae Warrant to Purchase Common Stock
- Fannie Mae Certificate
- Fannie Mae Senior Preferred Stock Purchase Agreement
FDIC React to Takeover
Fannie Mae & Freddie Mac Shareholder Ownership, via MSN:
Treasury News Conference:
GSE Bazooka Fired Ticker Forum, Karl Denninger (Video)
Wall Street Research
First thoughts on the market impact of the Treasury’s GSE plan, Goldman Sachs (PDF)
Paulson Begins Gradual Wind-Down of GSEs within Conservatorship, Institutional Risk Analyst
What the Mainstream Media had to say:
Monday, September 8, 2008
Mounting Woes Left Officials With Little Room to Maneuver WSJ
U.S. To Take Over Mortgage Giants Fannie, Freddie NPR Audio
The Dilemma of Fannie and Freddie NYT
In Crisis, Paulson’s Stunning Use of Federal Power Washington Post
The How, Why and What Of Fannie-Freddie Plan MORNING BRIEF
Here are the official statements on the Fannie & Freddie bailouts:
Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal
Housing Finance Agency Action to Protect Financial Markets and Taxpayers:
Good morning. I’m joined here by Jim Lockhart, Director of the new independent regulator, the Federal Housing Finance Agency, FHFA.
In July, Congress granted the Treasury, the Federal Reserve and FHFA new authorities with respect to the GSEs, Fannie Mae and Freddie Mac. Since that time, we have closely monitored financial market and business conditions and have analyzed in great detail the current financial condition of the GSEs – including the ability of the GSEs to weather a variety of market conditions going forward. As a result of this work, we have determined that it is necessary to take action. (continued after jump)
-Treasury Department, September 7, 2008
Treasury Department Reports:
Jim McTague, a dyed in the wool Republican, is surprisingly negative on the McCain/Palin team. Recall that McTague forecast the GOP would retain both houses in 2006, based on a calculation relying on campaign fund raising. McTague sounds more like a Democrat than a Republican.
Note the discussion on bailouts at the end:
THE 2008 REPUBLICAN PLATFORM RELEASED at the party convention in St. Paul last week is a grandiloquent document, replete with Reaganesque calls for lower taxes, smaller government, and greater self-reliance. An honest librarian would file it in the fiction section.
I’m not a naïf. I appreciate that searching for candor among politicians is about as productive as shopping for a Rolex at the corner drugstore. All politicians make promises that they never intend to keep. You generally can wrest a straighter answer from 16-year-old teenager intent on deceiving you than you can from a campaigning politician.
Even so, this GOP document is so divorced from reality that it approaches parody. The authors should have penned the document in cuneiform, because it describes an ancient GOP, not the party of today.
One of the platform’s most monumental political principles is daily being trampled upon by the Bush administration, with the acquiescence of most GOP members of Congress. This is contained in a section devoted to the housing crisis that declares, "We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself. We believe in the free market as the best tool to sustained prosperity and opportunity for all…"
Democrats are depicted as the party of big, intrusive government, willing to "ignore fiscal problems while squandering billions on ineffective programs." The GOP, however, has no moral legs to stand on when it hurls such insults.
The Bush administration has bailed out Wall Street, and stands ready to bail out mortgage giants Fannie Mae and Freddie Mac — in the process abetting a slide into more intrusive government. If we are headed down the road to socialism, then the GOP can be credited with setting the pavers. (Emphasis added)
The GOP has lost its way.
Spinning a Grand Old Fantasy
MONDAY, SEPTEMBER 8, 2008 D.C. CURRENT