Sat
Sep 6 2008
11:41 am
Fannie Mae and Freddie Mac takeover imminent, plus yet another bank failure
By: R. Neal

News reports confirm a story by the Wall Street Journal yesterday saying that the federal government is poised to take over mortgage backers Fannie Mae and Freddie Mac. Forbes has more details. It could cost taxpayers tens of billions of dollars, and will virtually wipe out the value of stockholder shares.

These government-sponsored, publicly traded companies back half the mortgages in the U.S. and have made it possible for average people to participate in the American dream of home ownership. John McCain's economic advisor Phil Gramm is the mastermind behind turning that dream into a nightmare for millions of Americans, who are facing the worst foreclosure crisis since the Great Depression.

In related news, a Nevada bank is the 11th bank failure this year. According to this Bloomberg report, the rate of bank failure in John McCain's "mental recession" is at a 14 year high. John McCain's son was on the board of directors of Silver State Bank, the latest failure, until his resignation in July.

Flashback: The Keating Five scandal, and how John McCain skated.

Topics:
bizgrrl's picture

Fannie Mae and Freddie Mac

Submitted by bizgrrl on Sun, 2008/09/07 - 6:53am.

Fannie Mae and Freddie Mac ...
$14.9 billion in losses the past year...
account for almost half of the $12 trillion U.S. mortgage market

In the broadest use of the central bank's lending power since the 1930s, the Fed in March scrambled to avert a market meltdown by giving investment houses a place to go for emergency overnight loans. The Fed has since extended those loan privileges into next year. Originally they were supposed to last through mid-September.

It [Bernanke's Federal Reserve]agreed in March to let investment houses draw emergency loans directly from the central bank. And, in July, the Fed said Fannie Mae (FNM) and Freddie Mac (FRE) also could tap the program. For years, such lending privileges were extended only to commercial banks, which are subject to stricter regulatory supervision.

Greenspan, 82, who ran the Fed for 18 1/2 years and was the second-longest serving chief, says he is concerned that Capitol Hill will look to the Fed's actions "as a wondrous new font of seemingly costless federal funding - a magical piggy bank."

The United States has long "abandoned the notion that we should leave crises to be resolved solely by the marketplace," Greenspan says in making the case for new powers in this area.

Big banks, investment companies fall and we (the country) must bail them out for fear our whole economy will fall apart. Billions of dollars spent to fix these "experts" errors in judgement. The people (amateurs) just trying to buy a house, obtain healthcare and/or health insurance, feed their children, get by day to day, continue to suffer with little or no assistance. Buyer beware, the invisible hand, suck it up, whatever. No government assistance for you!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

TN Progressive

TN Politics

Knox TN Today

Local TV News

News Sentinel

    State News

    Wire Reports

    Lost Medicaid Funding

    To date, the failure to expand Medicaid/TennCare has cost the State of Tennessee ? in lost federal funding. (Source)

    Search and Archives