yourdeadmeat69

A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan

Reducing the value of preferred and common to junk is appropriate, and probably understood by the last six months of investors, who have turned over this entire float at least three times. Maybe there are some institutions out there with $70 shares still on the books, but most retail folks are in these firms around $7-10 or so if they are still holding.

There will be a stampede tomorrow by folks who'll bolt in either direction, first to think this is some kind of new guarentee, then those that read the fine print and find out, govt GSE preferred is WORSE than private banking preferred, a quote from Paulson, traditionally lost probably SEVENTY YEARS.

After all, he just found out via JPM this is a "flawed model" and S and P took till conservatorship was announced to downgrade the stocks. Now that takes genius, doesn't it?

The truth, the common and preferred will be all over the place.

Fannie and Freddie: 80% Dilution

FED said they'd NEVER EXERCISE WARRANTS, so the warrant are a cap on the preferred, AND, a cost free "gift" to FNM/FRE--in "payment" for Paulson's woeful last minute decision that after 70 years, the "business model is flawed".

Rubbish. The mortgage granting model was deregulated to liar ninja loan status, the reserves these two firms fine, if regulatory guidance was enforced and in place. They said as much, their fault, their mess to get us out of.

The taxpayer pays, and the shareholders scapegoated for management incompetence, which escapes witht their millions. Japanese and our buddies the Chinese (!) get to continue to fund our wars, and the small investor continues to emulate Barney Frank, whether so disposed or not.

Paulson wisely left it to the markets to conclude the wipe out scenario this article incorrectly surmizes. S&P, those great harbingers of truth, downgrade the preferred and common to junk AFTER CONSERVATORSHIP?

Now that's the kind of forward thinking analysis we pay for....

In truth, this speculative stock will be all over the place the next three days. What a farce. Daytraders delight.

Freddie/Fannie Plans In Motion; Why Are They Being Underplayed?

Uhhh, calling common stock holders, 99% American "retail"--lottery ticket holders while insuring Japan, China and Europe "lottery ticket holders" who finance our worthless wars get their money--is not my idea of fair and balanced. Those furriners, thinking this country is like reruns of Leave it to Beaver. Your comments are the kind of self loathing that should have been reserved for your shrink when you made that liar loan.

Didn't scapegoating go out of style around the days of the Holocaust?
Does anybody in govt deserve responsibility for deregulation, or wholesale lack of lending standards? Do foreign investors come first, since they finance our worthless wars?

Seems to be that's a govt role abandoned to the gospel of "free" markets, as in free-for-all. Maybe it is better if they did pull their money, and we actually had to make something in this country, and live with it. You'd miss your made in China slave labor COSTCO shirt though, wouldn't you. $16.95.

Shareholders are little people with hope. Not all of us are like Dick Cheney, whose Halliburton oil stock is up 500% since the Iraq war started he originally said was a nonstarter in 1994, then sat back playing puppetmaster, while our ex drunk President tried to put two phrases together to make a whole sentence with his alcohol impinged brain.

The interlocking investments in common in 401K's will not only wipe out many folks, I think you'd better look at all those banks you love, many hold common in FRE/FNM and you should be checking REAL close. Wait till you see what THEY'RE holding....

Market will crash due to the stampede, just like it did in 1987 till people parse out the difference between conservetorship, and receivership. One preserves, the other is a do over. It'll be lost to the cattle, to include braindead misreporting at CNBC and WSJ, who I may add, can publish any drivel they want, as long as Uncle Fred goes short before the story hits the fan, and those misimpressions hit the blog board in perpetuity. Do your OWN DD, and listening to fast money and Cramer isn't due diligence.

And get out of the way of the cattle Monday, or run with them. The bulls at Pamploma Spain may be stupid and mean, but when they frighten, run with, not against them, or be trampled.

Rescuing Frannie

The nuance, conservatorship, will be lost as cattle stampede Monday because only Bloomberg understands the reorg revitalized the CURRENT structure with BACKUP loan authority. Symbolic board firings are window dressing BS. And toasting the American investor on behalf of the Japanese and Chinese investor is just as immoral as liar loans. Please don't forget, deregulation and the absence of loan standards was the Republican answer to "ownership". The real owners are the Chinese and Japanese and European bond holders, not Americans, and they finance the worthless wars and other fiascos.

Saving Japan and Chinese investments in swollen mortgage paper built on liar loans is the goal. Saving American shareholders? That's nickel and dime, but they get to be scapegoats dumb for investing in America, while the Chinese and Japanese pay for Republican wars that pop leadership's personal interests, like Cheney's 500% gain in Haliburton stock, waiting for him end of January 09. And the Fed has backed shorting commodities like gold and silver, to keep this from becoming a total rout...who knows if that will stem the tide, there isn't any physical silver and gold left to buy! Google Ted Butler who discovered that fiasco...designed to counter the Monday morning bloodbath.

We sure finally got around those pesky freedoms granted in the Constitution, financial slavery brought to you by the current administration, people more worried about oral sex in the Presidential palace than moral leadership in personal finance.

Look in the mirror if you want to blame anyone while you're driving your 10MPG SUV wondering why gas is priced so high.

Welcome to moron central.

Fannie, Freddie Headed for Conservatorship

The nuance, conservatorship, will be lost as cattle stampede Monday because only Bloomberg understands the reorg revitalized the CURRENT structure with BACKUP loan authority. Symbolic board firings are window dressing BS.

Saving Japan and Chinese investments in swollen mortgage paper built on liar loans is the goal. Saving Ameican shareholders? That's nicke and dime, but they get to be scapegoats dumb for investing in America, while the Chinese and Japanese pay for Republican wars that pop leadership's personal interests, like Cheney's 500% gain in Haliburton stock, waiting for him end of January 09. And the Fed has backed shorting commodities like gold and silver, to keep this from becoming a total rout...who knows if that will stem the tide, there isn't any physical silver and gold left to buy! Google Ted Butler who discovered that fiasco...designed to counter the Monday morning bloodbath.

We finally got around those pesky freedoms granted in the Consitution, with financial slavery. Flip those burgers America, if you don't mind not looking too closely at what they call meat, the funding of what we do, and the making of our clothes, is all outsourced to someone else we have to back on the backs of the American taxpayer.

Equity Markets, Forex and Precious Metals

I agree with the writer, SLW is a brokerage firm, not a mine, but it plays like one. The Fed is using banks, per Butler, to short commodities as it prints more fiat to bail out what looks to be the Depression of 2009 caused by real estate, the dust bowl of the early 21st Century, the trigger point for world Depression. Lies about inflation first and second quarter make the economy appear to be expanding, it's contracting. There are 8400 foreclosures in Los Angeles alone, and housing has at minimum, another 17% to fall.

If the Fed didn't cheat and keep a short lid on silver and gold, gold would already be $2000, silver $25. By manipulating the POS and POG via shorting miners, the govt keeps the illusion fiat is worth something.

How long that will be possible to do? Hey. They are successful burdoning the future with unending debt, why shouldnt they be able to print fiat to support fiat indefinately, regardless. When Bunker Hunt cornered the silver market 1980, they went to jail.

When the Fed does it using banks as a front 2008, they get away with it.

For a while.

Why I Finally Bought Fannie Mae

Great post, but facts auger in the other direction. There's upwards of $300B in liar loans and subprime we know about, and Paulson's 26B here, and 25B there, don't even touch the surface of all those adjustable rate three year loans that pop from $2000 a month irate only to $3800 a month over the next eighteen months, on houses that are worth 70 cents on the dollar represented in those mortgages. Folks are walking away or foreclosures are doubling monthly--and those "short loans" where 350K exists where $550K used to? Those loans designed to keep foreclosures from burdening the market? That helps valuation, which is due to decline ANOTHER 15 % by summer of '09--but--Who do you think is eating the other $200K off balance sheet, even though these firms are calling the tax loss an ASSET versus liability? (Which is like calling a store coupon money, by the way.)

These "leaders" in charge of the Fed have been feeding us pablum for years, from war, to removing gold and silver from being money, but some of us passed eigth grade math and know differently when we look at the quality of the doc behind the paper. It was always second tier, by design. No doc, is a joke, not an investment.

Under the radar, two years ago, I Oct '08 law strengthening the documentation requirements even for subprime, might have made a difference. Sorry. It is too late for anyone but daytraders this stock. The common we bought is toast, the world cringing as they decry, as oversea did this morning, that they, overseas, have FNM/FRE bonds, and the Fed govt will buy preferred, as stopgap, diluting the entire company, pressuring common further, getting priority for payout, when and if dissolution occurs. Political gaffe, from bailing out the common, prevents us from any rescue. We, the common, is toast.

Fuhgeddaboudit.

Time to do a Billy Crystal "do over", repackage the liar and subprime loans into something somebody will buy overseas (good luck), keep the doc paper and the new loans coming into a new entity with strict guidelines.

That honors bond holders and preferred the old FRE/FNM, that trashes the common you and I hold unfortunately, but it starts the world repairing itself.

I tried to call my Congressman on this issue this week.

They were on vacation. The Housing Chief came back off vacation to talk the matter over with Paulson et al yesterday.

I think he came back to pick up a pair of socks he forgot.

Call do over, and let's straighten this thing out without leaving it lingering over the American people and the world another YEAR!

Why is Bill Miller Increasing His Stake in Freddie Mac?

Google Laingly, the Barron article writer, you'll find it quoted word for word SIX MONTHS AGO pre "bailout". Must be a slow news day, or, Barron's feels its ok to launch an out of date provocative tease, to extort you into buying a subscription to read the "rest" of the story. The SEC ran a story today that it would aggressively pursue those who yell fire in the theatre, that is tell provocative lies, to move markets, and that is exactly what the article in Barron's does. Laingly actually has a way out--he has another googlable article four months later than this rehash, stating housing is in recovery mode!!! Can't have it both ways, unless his money with Uncle Fred is hedged short and long, a tactic Jim Cramer described in Wall Street Confidential couple years back on how to engineer stampedes and make money from the resultant panic.

FRE and FNM have their problems, but time to make new good loans and repackage the old, opportunity to make the Oct law work for better paper, these are things we haven't even tried yet.

And my sentiment? I'm long the stock, short in the money covered calls. I make money, or are at least protected, either way.

So why call these newspaper clowns out if I make money either way?

I don't like scumbag journalism, I don't like misuse of power, and I despise those working under the guise of independent thought, and are in positions where it isn't ok to lie obfuscate or have another agenda.

Beware the U.S. Dollar's Head-Fake Rally

The head fake prognosis, is correct. Oil is shrinking on lowered PROJECTED US demand, as if this winter the NE US is burning something else (analyst reports perhaps?), China and India carbuyers will jump TEN FOLD to 600 MILLION in the next 36-60 months, and those cars will be running on gas.

The housing bust is bankrupting Freddie and Fannie, the FED promise to buy bonds and preferred will wipe out common stockholders, and send the dollar reeling. Right now housing deflation says, less dollars will be printed amongst consumers. True, but 3 TRILLION need to be printed to bail out mortgage and banking institutions which otherwise, would go belly up. Another reason for the temp dollar pop--foreign investment in those bonds got an assurance from the FED that those investments were literally good enough for the US govt.

It's all smoke and mirrors. Gold is worth $1050 an ounce, whatever the spot, on simple inflation since Nixon let it float 1971. It ended that year about $105. If you bought a 240Z Nissan then, you paid $3500, about $44000 for a house. Same car now is 35,ooo, same house is $440,000 (not $595,000 last year), so just add a zero to the POG.

Should be $1050. We're back to $850, with the same $200 to run to end of year.

That means the dollar has about 15% more to decline from current levels.

And THAT's the nasty secret the blogger is writing about.

Gold Should Continue to Outperform; Dollar Should Fall

The US Fed must print or make available 1-3 TRILLION dollars to cover Fannie and Freddie, because not only are subprime ripe not to pay, the valuation of ALL homes bought 2004-7 are overvalued 35%, of which 20% valuation remains to fall. 20% may be offset by 5% annual real estate inflation expectations, so in three years it may be mitigated by normal return to the curve, but meantime, EVERYONE purchasing a home '04-'07 is upside down, the valuation of their paper "off balance sheet". This balloon rests on a pin, and stays of execution, the on balance sheet requirements imposed for August, were extended to avoid more pressure on that "pin".

It's only a matter of time, until some pundit folks listen to yell "who's behind the curtain" and the wizard of Oz will reveal himself as Bernanke and his Congressional elves.

Whoever holds specie or miners at the time it bursts, will hold assets mining $2000 gold, $35 silver.