madasiwannabe

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.

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.

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.

Moody's, Fitch, S&P, SEC Are All Useless

The credit rating agencies are all masters of the obvious. Downgrading a company after it falls says it all. Where were they 6 months ago when the market figured it out.

SEC is very good at sitting on their hands. Naked shorts are not killing stocks, bad policy and greedy companys are. As you alluded to, LEH was a victim of long selling, not short. Also include Paulson's confidence building backstop scheme. All it really did was make everyone question the real health of the market. You know it's time to worry when everyone tells you not to.

ARS Buybacks: Wachovia Follows the Herd

If the GSE's are sneezing, the banks have pneumonia. Billions worth of ARS buybacks added to the loss column of their balance sheets can't be a good thing. Many are already struggling with subprime bloated portfolio's and because the property values have fallen against an originated 125% LTV combined mortgage, the housing bill is not going to help. Rolling deliquency filings from 3 months to 12 only prolongs the inevitable.

Soon to add to the problem is the news that most are looking at the house of creditcards coming down. If I was going to pick a winning horse in the financials I would go with Freddie and Fannie. They seem like they are high risk, but truth is, if they collapse, a black hole will form and suck the rest down anyways.