madasiwannabe

Did the SEC's No-Short List Impact Stock Prices?

We all know that even though there was a ban, there was still shorting at the same levels. Sure there was a couple days of relief while the rookey home players flooded back in, but it quickly faded when word got out how to cirumvent the ban. Can't short MS, MER, C, BAC... just buy SKF or SDS... Too expensive, short UYG or XLF and you get the same index at 1/10 of the price.

Who is Cox kidding???

Is the Government's Fannie/Freddie Conservatorship Failing?

ClairePaula, there's a lot of questions still left unanswered and too many contradicting comments from Paulson and Lockhart, so until their's a solid direction and consistancy in communications with those involved, the GSE's will continue to move up and down.

FIrst they say they have enough capital to continue to operate for 6 quarters, then they take them over and wipe out 36 Billion dollars worth of shareholder value. Then they bash them for becoming too big, and turn around and order them to become bigger... They say they are in financial trouble and tell the world their job is to protect their assets and return them to profitibility as possible, then they say they are going to use them to buy up troubled assets from the finanacials, which would destroy what's left of shareholder value. If they are in trouble why hasn't the treasury used any of the "Backstop" money?

They are suppose to release Q3's on the 17th, but once again, Lockhart commented several weeks ago they didn't have to report while in conservatorship. I think investors are scared to put any money into either Fannie or Freddie because of the obvious "new management" issues. Until these guys go away, I wouldn't go anywhere near either Fannie or Freddie.

REITs: Insurers Supplant Banks As Lenders

Poncawolf, it doesn't work that way. The only inqueries that count against you are the ones made by you applying for credit. Inqueries by banks before they send you a pre-approved are on a completely different section of your report. What kills your credit is filling out applications when your car shopping and end up not buying. They are looked at as if they were rejections. Another killer is switching credit cards. They stay on your record as lines of credit, even after they are closed. Better to call the company and throw a fit when they bump your rates up. Works every time.

GM, AIG, Fannie and Freddie: Bailouts in Common?

thedozer,
There was a piece of pork in last years federal budget that allotted 50 Billion to the automotive manufacturers so they could do R&D on alternate fueled vehicles. Funny part is they have dozens of models already being sold around the world that are not currently available in the US.

The money was not suppose to be given till next year but the lobbiests convinced the government to give them the money early. By the way, it's not a loan... it's a grant funded by our tax dollars.

Pathetic Display at Yesterday's Financial Hearings

Why isn't anyone asking him about his current employment? He sent the trains down the tracks and then left office to profit from the wreck. When it looked like it wouldn't happen, he got on TV and made sure it did. The companies he now consults for made Billions when the feds finally stepped in and took over the GSE's. Congress knew about it in January when they questioned the conflict of interest but for some reason has done nothing.

Congress doesn't want the truth to come out because of the number of people with their hand in the cookie jar. In 1999 then CEO of GS, Paulson convinced congress to pass a deregulation bill that caused the CDS market to explode. Paulson in 2005 convinced Cox to dismantle the CDS regulators Donaldson put in place. When the MBS/CDS market started to unwind and investment banks like GS started to implode, Paulson threw the GSE's under the bus. GS made a ton when LEH imploded, but stood to lose 20 Billion if AIG suffered the same fate. GS helped negotiate the loan for AIG to save their own skin.

Frank blocked legislation to contain the GSE's while his boyfriend worked as an exec at FNM. Go do a search on descrimination lawsuits against the GSE's in 2003/2004 and the congressional hearings. Then look at adjustments to GSE capital requirements, market share growth and sub prime exposure levels YOY... How could they grow exponentially at the same time the accounting scandals hit? Ask Chris Dodd... At the same time Countrywide started making sweetheart deals to members of several committees. At the same time, Countrywide became the biggest sub prime broker and Fannie Mae's biggest customer.

Look at the GSE's books very close and compare those statistics to the rest of the market. Their losses were actually very conservative compaired to the market, default rates were very 1/10th of WM and WB, their forclosed property holdings are 1/20th of the national total, but their holdings are half of the market. The week before they took over the spreads were actually down from previous weeks and stock prices were moving up. If they were in terrible shape and ready to collapse, why hasn't Paulson used one nickle of the 200 Billion congress authorized yet?

A lot of people have a lot to answer for and we the American people deserve to hear the truth, not after the election.... NOW!!!!

Proposed Homeowner Bailout Plans are Loaded With Problems

Why do we need more money for McCain's plan? We have a bill already.... It's called the housing bill. The majority of the bill focused on refinancing destressed homeowners into managable loans. There was 200 Billion allotted to accomplish it. For some reason Paulson and Lockhart think it's a slush fund for the GSE's.... READ THE BILL.

Another point, if the GSE's needed the money so bad, why haven't they used it? Probably because they didn't need it in the first place. Paulson doesn't want to help the homeowners, he want to help his friends on Wall St. He wants the GSE's to buy loans from the banks so that no one has to pay out for the swaps. Biggest winner: Goldman Sachs.

I won't even get into how AIG's bailout saved GS 20 Billion in Swap payouts and when LEH was allowed to fail, GS also made Billions. Funny how GS is always on the right side of Paulson's decisions.

Please go find and report the whole story on this. The public deserves to hear the truth.

Vultures Covet Infrastructure in Financial Wreckage

You nailed it... The GSE's were not in danger of failing. Paulson admitted they were suffering from loss of market confidence, not liquidity issues, and that's why he stepped in. He felt the GSE's were dragging the entire sector down. He planned all along to gain control of them and use them to absorb the toxic sludge from the financial market. He needed the capital guarantee from Congress to pull it off.

If Fannie and Freddie were actually financially upside down, why hasn't Paulson used one nickle of the money authorized by congress in the Housing bill? Why would he order them to buy more mortgages? No one is asking any of these questions.

The bigger question is how can he get away with taking over solvent companies just to financially implode them? Conservitorship laws say they must preserve assets and return the companies to profitability. What has been done is called eminent domain, without any compensation that is. This is a violation of shareholders 5th amendment rights.

I hope congress starts figuring out they have been duped. They need to dig into what's happened and hold those responsible for this fraud accountable. If this is allowed to continue, we the taxpayers will end up doubling our national debt before it's over.

Are Big Banks Too Big to Fail?

Fannie and Freddie were well regulated... The regulators were right there to ensure they had enough liquidity to take on mortgages as the bubble grew. When they ran low, the regulators reduced their capital requirements. When the banks were taking on too much risk with Sub-primes, the regulators had the GSE's drop their bar and take some of that paper off their books. When things went south, they were right there to place the blame. Now the same regulators that are legally responsible to protect the companies assets and return them to profitibility want to use them as toxic waste dumps to clean up the balance sheets of greedy banks.

We need more of these guys around to make sure things go hopelessly wrong next time.

Can the Banking System Handle Huge New Write-Downs?

What about my loan. I put 40% down and have a debt ratio below 20%. Sure I screwed up by living well within my means and paying my bills on time, but my property value has dropped 15% too. That drop is before all of my neighbors get their mortgages slashed and their new deals become my comps. Under the bailout deal it seems like I get to pay twice; first through my tax dollars and then again with the further depreciation of my property value.

What gets me is if we let them default, I lose anyways. The banks will auction off the properties at a huge discount and once again their sales become my comps. Where's the bill that offset my losses when the irresponsible borrowers and lenders get done destroying my future?

It's All About Guaranteeing Counter-Party Risk [Housing Tracker]

The GSE's were better capitalized before conservatorship then they are now. The takeover was just a knee jerk move to treat the symptoms. The cure ended up being worse than the problem.

Buying troubled assets is another treatment for a symptom. The banks got themselves in trouble, and should be allowed to get themselves out. Buying equity stakes in the companies is a much better solution for the markets as well as the taxpayers. It doens't relieve the banks from their responsibility, but it does give them the capital they need to work through the issues, and in the end, the taxpayers will be rewarded.

Since the government takeover had nothing to do with insolvency, and had everything to do with restoring market confidence at the expense of the GSE's, the terms of the intervention are completely out of line with today's market reality. Only question now is will the treasury level the playing field by cancelling the warrants and instead take equity stakes in the GSE's equivelent to the capital they have injected?

Paulson in a State of Panic

AMEN!!! Conservatorship doesn't give Paulson the right to wipe out the GSE's to save the other mortgage holders. The laws are very specific about the charter of a conservator, and unless there's more to the purchases that secures the current company value, this goes against that charter.

We all know the takeover had nothing to do with the solvency of the GSE's. If it did, why haven't they used any of the 200 Billion to stabilize the GSE's. Paulson knew all along that at some point he would use the GSE's to buy up toxic assets to clean the books of his buddies. I find it interesting that every time Goldman Sachs or Morgan Stanley stocks take a dive, Paulson comes up with another plan. Time to get the FBI and supreme court involved to stop this madness.

So the Perpetrators Are Now Our Saviors?

Thank you. It's about time someone pointed out how the GSE's got into trouble. It actually started with lawsuits over descrimination. Basic assertion was the new automated computer program profiled minorities. That started the hearings and resulted in the congressional mandate to open the flood gates... After all these are GSE's and it's not good for a government agency to be accused of unfair lending practices.

Need to look into Countrywide's "Friends of Anthony" program. Think you will find that Fannie Mae's biggest sub prime / alt-A customer was Countrywide. Most of these loans were rejected by the GSE's till 2004. A lot of banks took advantage of the reduced requirements too, but regulators have a responsibility to make sure they can't.

The news media is wrong. Today's drop wasn't lack of confidence. If it was, it would have been down all day in spite of the news. Today was a classic pump and dump. The hedgies took advantage of the big gains and positive news to catch everyone leaning and dump their stocks for a profit. It happened across the board so it was a coordinated attack. A lot of people lost a lot of money today when it should have been a big up day for all.

Hopefully the SEC is looking into this.

What Happened to the Fed's $1.816 Trillion Lifeline?

The damage was already done to both of these guys months ago. The shorts were already bought into both WB and WM long before the ban. What finally brought them down was long selling due to lack of confidence and fear.

It wasn't a secret that both of these guys were bloated with loan portfolio's in the two hardest hit areas, Florida and California. Once WM fell, it was only a matter of time before WB followed.

How Much Are Fannie and Freddie to Blame?

Your forgetting your history. In 2003/2004, the GSE's were flooded with lawsuits for racism. People were complaining that they were denied loans for no reason so it must be ratial profiling. Their disadvantaged numbers were not consistant with their competitors so it looked bad on paper for Fannie and Freddie. When you look at the first case, a single black female, her FICO was 560.

To get the dogs off, Congress had OFEHO mandated that both Fannie and Freddie lower the bar. They did and now look where they are at.

In 2004 the CEO of Freddie ignored the Chief Risk Officer when he came forward with concerns. On an interview his explination was "I understood the risk, but I work for many masters". Yes the GSE's took on too much risk, but not for greed or to keep up with the Jones's.

Look up speeches by Bush and Greenspan in 2004. They were preaching owning a piece of the American dream was as a right and urged banks to come up with ways to make loans available to all Americans. They did.

Time for the media to talk with OFEHO and Congress to get the real story.

Wachovia-Golden West Transaction: A Disaster Without Peer

Shocking how all of these companies got in trouble. What's more shocking is how Wamu and Wachovia were given away for a song. Bank of America knows the 30 Billion they wrote down on purchase will be turned around and sold when the bill is passed. That means BAC made a 30 Billion profit for their trouble. Same with Citi. It's a shame the investors and shareholders got left holding the bag.