Comments on: Fannie And Freddie Into Receivership http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/ Firedoglake weblog Wed, 25 Nov 2009 18:02:29 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: dude http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1618082 dude Sat, 06 Sep 2008 15:55:38 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1618082 <p>Abolutely right, Clinton is also culpable in my view.</p> Abolutely right, Clinton is also culpable in my view.

]]> By: ekunin http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1618030 ekunin Sat, 06 Sep 2008 15:14:33 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1618030 <p>I’m not sure if you’re blaming China. If you are I think it unfair unless you blame them for being an enabler which may have some validity. The thing I like about our government is that it seems ready to bail out everyone in sight, a neat trick for an outfit that runs serious deficits.</p> <p>Fannie and Fredie present a great opportunity for a pool. We should each put in a buck and pick the final cost. My bet is an even trillion. Don’t know how long the world will keep running our tab.</p> I’m not sure if you’re blaming China. If you are I think it unfair unless you blame them for being an enabler which may have some validity. The thing I like about our government is that it seems ready to bail out everyone in sight, a neat trick for an outfit that runs serious deficits.

Fannie and Fredie present a great opportunity for a pool. We should each put in a buck and pick the final cost. My bet is an even trillion. Don’t know how long the world will keep running our tab.

]]> By: alank http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617937 alank Sat, 06 Sep 2008 14:00:18 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617937 <p>I don’t agree with the assessment of Paulson, but it’s unusual here at FDL to see someone admitting that the commodity inflation was due to Fed policy and the speculation it induced in those markets.</p> <p>The post is full of good information, but the suggestion that anything like policy failure or wrong choices misunderestimates the motivations for them. The intent right from the start was to socialize the bad private debt generated by Greenspan’s financial bubble policy run amok. To arrange for only selected stockholders to recover (or cover) their losses is pure gravy, in my estimation. There are no errors or miscalculations going on here. It is quite systematic and deliberate, what they’re doing.</p> <p>Paulson takes over as he is capable of acting completely without compunction. Bernanke is more the academic who’s vain about his own theories of monetary policy, enough so, to risk extreme havoc for the general run of people in order to test them.</p> I don’t agree with the assessment of Paulson, but it’s unusual here at FDL to see someone admitting that the commodity inflation was due to Fed policy and the speculation it induced in those markets.

The post is full of good information, but the suggestion that anything like policy failure or wrong choices misunderestimates the motivations for them. The intent right from the start was to socialize the bad private debt generated by Greenspan’s financial bubble policy run amok. To arrange for only selected stockholders to recover (or cover) their losses is pure gravy, in my estimation. There are no errors or miscalculations going on here. It is quite systematic and deliberate, what they’re doing.

Paulson takes over as he is capable of acting completely without compunction. Bernanke is more the academic who’s vain about his own theories of monetary policy, enough so, to risk extreme havoc for the general run of people in order to test them.

]]> By: Ian Welsh http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617814 Ian Welsh Sat, 06 Sep 2008 07:14:56 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617814 <p>haha. I’m behind the curve. Nouriel used to be predicting 2 trillion for the entire credit crisis, not just for f/f. Are you sure it was just f/f?</p> haha. I’m behind the curve. Nouriel used to be predicting 2 trillion for the entire credit crisis, not just for f/f. Are you sure it was just f/f?

]]> By: Novista http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617745 Novista Sat, 06 Sep 2008 06:20:01 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617745 <p>EPU territory, oh well.</p> <p>Some time back, Nouriel Roubini predicted F/F woes — and reckoned the total bill would be over one *trillion* … more lately, he’s revised upward: to TWO trillion.</p> <p>An analysis by one Don Rich a couple of days ago crunched the numbers to a worst-case outcome of 2.5 trillion. Yikes!</p> EPU territory, oh well.

Some time back, Nouriel Roubini predicted F/F woes — and reckoned the total bill would be over one *trillion* … more lately, he’s revised upward: to TWO trillion.

An analysis by one Don Rich a couple of days ago crunched the numbers to a worst-case outcome of 2.5 trillion. Yikes!

]]> By: Ian Welsh http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617650 Ian Welsh Sat, 06 Sep 2008 05:07:00 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617650 <p>If you wait that long, you might not get the bailout on such good terms, since there’d be a new Secretary of the Treasury. It’s not just me calling for bondholders to take a haircut, this ain’t a hippy position, lots of perfectly mainstream economists, hedge fund managers and so on are calling for the same thing (if, unlike Gross, they don’t own that stuff.)</p> If you wait that long, you might not get the bailout on such good terms, since there’d be a new Secretary of the Treasury. It’s not just me calling for bondholders to take a haircut, this ain’t a hippy position, lots of perfectly mainstream economists, hedge fund managers and so on are calling for the same thing (if, unlike Gross, they don’t own that stuff.)

]]> By: Ian Welsh http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617648 Ian Welsh Sat, 06 Sep 2008 05:05:14 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617648 <p>It’s a game of chicken. The same considerations are at play with other central banks. There has been no decoupling. If China pulls the trigger they blow the bottom out of the boat they’re in too.</p> It’s a game of chicken. The same considerations are at play with other central banks. There has been no decoupling. If China pulls the trigger they blow the bottom out of the boat they’re in too.

]]> By: Ian Welsh http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617646 Ian Welsh Sat, 06 Sep 2008 05:04:27 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617646 <p>If capital gains are higher, then certain investments become less profitable. Secondary securities markets are necessary to ensure that people have liquidity for primary investments - that’s the argument and it’s true. There are things you can do, however, the primary of which is to tax short term capital gains very highly and long terms gains fairly low. I don’t think there’s much in the way of good arguments against that, frankly, as I don’t think most debt should be short term (actually debt should match duration to whatever the term of what you’re using it for, but that’s a whole can of worms.)</p> <p>Anyway, short answer - unearned income should be taxed the same as earned income, and I would make an exception for primary investments held at least 3 years and secondary investments held at least five. Exact numbers can be quibbled.</p> <p>To deal with the “go elsewhere” issue you simply put currency controls back in place, which they should be anyway. If you want to live somewhere else, great, but if you don’t, then you’re screwed. And if you want to invest in the US, your money more or less stays in the US. Yes, this would mean a decline in foreign investment that’s largely a good thing. It would be possible to get money out, but it would take time.</p> If capital gains are higher, then certain investments become less profitable. Secondary securities markets are necessary to ensure that people have liquidity for primary investments – that’s the argument and it’s true. There are things you can do, however, the primary of which is to tax short term capital gains very highly and long terms gains fairly low. I don’t think there’s much in the way of good arguments against that, frankly, as I don’t think most debt should be short term (actually debt should match duration to whatever the term of what you’re using it for, but that’s a whole can of worms.)

Anyway, short answer – unearned income should be taxed the same as earned income, and I would make an exception for primary investments held at least 3 years and secondary investments held at least five. Exact numbers can be quibbled.

To deal with the “go elsewhere” issue you simply put currency controls back in place, which they should be anyway. If you want to live somewhere else, great, but if you don’t, then you’re screwed. And if you want to invest in the US, your money more or less stays in the US. Yes, this would mean a decline in foreign investment that’s largely a good thing. It would be possible to get money out, but it would take time.

]]> By: MarkH http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617643 MarkH Sat, 06 Sep 2008 04:59:42 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617643 <blockquote><p>The only true “stimulus” for the market is to lower corporate tax rates and bring business back to the US.</p></blockquote> <p>If the problem is good places for investors to put money with low risk, then what difference would lower corp. tax rates make?</p> <p>What you need is the Green Revolution or somesuch to actually create REAL stuff and then the financials can track that.</p> <p>What Bush & Co tried to do before to F&F was to scare people into thinking it was crashing so they’d sell out and then they could walk away with a lot of wealth for pennies.</p> <p>Is that what’s happening now or is there a real plan to simply steal it?</p> <p>Bush & Co. — America’s biggest mafia!</p> <p>Bernanke should spank ‘em all hard!</p>

The only true “stimulus” for the market is to lower corporate tax rates and bring business back to the US.

If the problem is good places for investors to put money with low risk, then what difference would lower corp. tax rates make?

What you need is the Green Revolution or somesuch to actually create REAL stuff and then the financials can track that.

What Bush & Co tried to do before to F&F was to scare people into thinking it was crashing so they’d sell out and then they could walk away with a lot of wealth for pennies.

Is that what’s happening now or is there a real plan to simply steal it?

Bush & Co. — America’s biggest mafia!

Bernanke should spank ‘em all hard!

]]> By: ThingsComeUndone http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617642 ThingsComeUndone Sat, 06 Sep 2008 04:35:05 +0000 http://firedoglake.com/2008/09/05/fannie-and-freddie-into-receivership/#comment-1617642 <p>Sorry I’m late Ian but just how bad are things at Fannie and Freddie if Bush couldn’t wait until after the election to spring the news?<br /> There is no doubt that this will hurt McCain especially with the McCain son’s bank going belly up.</p> Sorry I’m late Ian but just how bad are things at Fannie and Freddie if Bush couldn’t wait until after the election to spring the news?
There is no doubt that this will hurt McCain especially with the McCain son’s bank going belly up.

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