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kahunabear
8 Comments
PowerShares Financial Portfolio: A Preferred Idea
What Kind of Government Support Will Fannie and Freddie Get?
What Kind of Government Support Will Fannie and Freddie Get?
Fannie and Freddie are A-OK. The crash of their stock prices must be some kind of anomaly. Also, the falling dollar, skying commodities, crashing banking stocks, bankrupt mortgage companies, plummeting housing prices, etc. all seem to point to a bright future. We certainly seem to be winnning this "keep-the-economy... full employment game". The Minisirty of Truth also says we are winning the inflation game. Phew. Happy times ahead.
What Kind of Government Support Will Fannie and Freddie Get?
Neither the stockholders or bond holders should be bailed out. The bonds have no guarantee. And if it is "implied", it shouldn't be.
The very best thing for the mortgage market is to let the buyers of the bonds feel the pain of taking on risky mortgage backed securities. Thisis the only way to prevent this rapant "risk free" speculation in the future. Letting the bond holders earn a return in line with the return that the actual mortgages produce will cause future mortgages and mortgage bonds to be priced appropriately by the market.
Otherwise, we will end up right back in another bubble where the robber barrons rape the taxpayer by taking ridiculous risks to line their pocket books knowing they can pawn off any losses to the masses.
This is exactly what is wrong with American crony capitalisim. Alas, my idea will never happen. We are doomed to a future of pillaging and will eventually end up as a Banana Republic. Oil, gold and commodities are proving to be a much more reliable currency and store of value than the buck. They aren't making any more oil or gold. On the other hand, their is an unlimitled supply of Bernanke bucks.
The ABCs of the Fannie Mae / Freddie Mac Problems
en.wikipedia.org/wiki/...
The ABCs of the Fannie Mae / Freddie Mac Problems
The very best thing for the mortgage market is to let the buyers of the bonds feel the pain of taking on risky mortgage backed securities. Thisis the only way to prevent this rapant "risk free" speculation in the future. Letting the bond holders earn a return in line with the return that the actual mortgages produce will cause future mortgages and mortgage bonds to be priced appropriately by the market.
Otherwise, we will end up right back in another bubble where the robber barrons rape the taxpayer by taking ridiculous risks to line their pocket books knowing they can pawn off any losses to the masses.
This is exactly what is wrong with American crony capitalisim. Alas, my idea will never happen. We are doomed to a future of pillaging and will eventually end up as a Banana Republic. Want to know why oil is so high? It is a heck of a lot more reliable currency and store of value than the buck. They aren't making any more of it. On the other hand, their is an unlimitled supply of Bernanke bucks.
Calls For A Market Ready to "Rocket Higher"
Stocks are cheap?
Don't fight the fed?
Move along, nothing new here. Been hearing this since Dow 14,000.
Got anything new to say?
Dear Ben: 5 Suggestions for Saving the U.S Economy