News: Fannie Mae/Freddie Mac: Another Reason to FAIL!

Here's another reason Freddie Mac and Fannie Mae SHOULD be allowed to FAIL.

I personally think this is O B S C E N E !!!!!


AP Reports:

Fannie and Freddie, which hold or guarantee nearly half of the $12 trillion U.S. mortgage market, have seen their stock prices tumble from over $60 a share in 2007 to under $10 last week

Let's take that paragraph apart!

Fannie and Freddie, which hold or guarantee nearly half of the $12 trillion U.S mortgage market, GUARANTEE HALF of ALL that money???
So Fannie and Freddie EACH Guarantee THREE BILLION Dollars??

...These TWO banks...have seen their stock prices tumble from over $60 a share in 2007 to under $10 last week...

And can you not actually SEE that THIS will affect our society???

upcoming financial failures leading to future failures.

More Financial Troubles for the USA...


I can safely (I guess) forecast the folllowing:

1) The 'sub-prime' mortgage crisis IS NOT over in USA.
1a) It will ONLY be getting WORSE.
1b) Most BANKS will NOT be getting better. For some INSANE reason, these banks have only been doing SMALL write-downs each quarter.
1c) There is STILL no liquid market for the bonds that these mortgages have been bundled into. And there WON't be one for a LONG time.
1d) Therefore, any bank who invested in these bonds will be forced (hee hee) to WRITE them off, when they come up.

2) The Exact same problem with sub-primes (the fact that they were taken, put into a group BUNDLED together into a (say) million dollar face value), and then sold ALSO happened with one other financial problem...
That is CONSUMER credit card debt. Yes. Your credit card balances with citibank, bank one, are ALL taken, and put together into
BIG bundles until someone can buy (say) a million dollars of receivables....

How does that create a crisis??? Can you say .... Depression? bad (really, really, really, really bad Recession) Depression?!

forcloseures rise, late fees rise, defaults rise, EXACT same problem... Too many defaults will trigger the SAME crisis, different FINANCIAL product.

Strike Two against the economy (strike one was the subprime, #2 the credit card).
Strike Three? who knows....

News: Economy: Freddy Mac/Fannie Mae woes

hey( WHO's counting? Let's say the fed did NOTHING. Then these semi-public companies would no lolnger be able to sell their bonds.

The bonds they sell are Mortgages, that are (get this)... Packaged together, not sub-prime, but are pooled into big (think million dollar) pieces.

Gee... Sounds similar to the previous (Sub-prime Mortgage ) bonds that lost all their value.

or similar to what I think will be the next crisis: the crisis based on the CREDIT card balances that have ALSO been aggregated into major league bonds.

Arguh.