Fannie, Freddie to be seized

[PLATO]

Originally posted by DanS
As I understand, a lot of foreign governments have preferred shares in these companies. Those investments will be wiped out.

Nope...preferred shares and debt to be protected. Common shares to be diluted.

Paulson has been working with Morgan Stanley on this for over a month now. Looks like there may be some additional investors lined up once the government injects some money.

This is a bold move by Paulson to try and restore confidence to Fannie and Freddie. Both companies were still exceeding their capital requirements as of Friday. Paulson could have let it ride for a while.

[chequita guevara]

Originally posted by PLATO


Nope...preferred shares and debt to be protected.

[Hercules]

Originally posted by PLATO


Nope...preferred shares and debt to be protected. Common shares to be diluted.

Paulson has been working with Morgan Stanley on this for over a month now. Looks like there may be some additional investors lined up once the government injects some money.

This is a bold move by Paulson to try and restore confidence to Fannie and Freddie. Both companies were still exceeding their capital requirements as of Friday. Paulson could have let it ride for a while.

There will be further repercussions, I suspect.

The most galling aspect is that the CEO's and senior staff will leave with performance bonuses.

[DanS]

Originally posted by Colonâ„¢
Curtailed? They need to be nationalised and liquidated. Their operations should be non-existent in the long run.

These companies own or guarantee $5 trillion in long-term assets and this is a particularly nasty downturn in the market on these assets. It seems realistic that it will take several decades to wind down these operations.

[LotC]

The invisible hand of the market at work?

[Dinner]

Originally posted by DanS


Did you even read the article that you linked? Obviously, what you are saying is wrong.

OK, I miss read it. John McCain's son was on the board.

[DanS]

Here's the plan...

http://online.wsj.com/article/SB122079276849707821.html?mod=hpp_us_whats_news

Nope...preferred shares and debt to be protected. Common shares to be diluted.

This is not clear to me. The treasury will be issued senior preferred shares with warrants that will dilute the common shares. The dilution doesn't look too bad for the shareholders given the current stock prices (better to have 20% of a solid company than 100% of a nearly bankrupt company) -- I would have expected basically a 100% haircut.

[rmsharpe]

Thanks, interventionists! Now the poor judgment of some people is inflicted on everybody!

I wish someone would bail me out every time I make a bad decision.

[faded glory]

I heard that when obama gets elected, all problems will be fixed and anytime a poor or middle class person walks past an ATM machine it will spit out endless dollars at them.

[rmsharpe]

Originally posted by faded glory
I heard that when obama gets elected, all problems will be fixed and anytime a poor or middle class person walks past an ATM machine it will spit out endless dollars at them.

That's why I call him Barack Mugabe.

[faded glory]

also, lol let them fail. Too many nobodys got rich off real estate that would otherwise be greeters at wal mart. Let them be broken aswell, its part of the cycle

they took risks if i take risks they foreclose on me.


The housing collapse is a neccessary thing that should go its course. FFS I am sick of the cheapest place in town being 1000$ a month for a rundown 700 sq foot place with pipes as walls, and so should everyone else. **** face mouth-breathing landlords will have to actually charge fair rent if they want to keep there source of income.

[faded glory]

Originally posted by rmsharpe

That's why I call him Barack Mugabe.

hehe. the point is other than vague speeches on change, Obama's stated policies wont have much effect on anything except that bill we keep shoving off to our grandkids.

Bailouts/new programs require spending, Spending requires taxes, taxes prevent investment and jobs, Jobs and investment create new revenue.

[Colonâ„¢]

Originally posted by DanS


These companies own or guarantee $5 trillion in long-term assets and this is a particularly nasty downturn in the market on these assets. It seems realistic that it will take several decades to wind down these operations.

I don't see how any outcome other than their elimination would be positive. These companies became huge because of the implicit gov't guarantee on their debt. As long these companies exist the (now rather explicit) guarantee will exist and the GSE's will outcompete other firms. You don't curtail a cancer, you cut it out.

Thanks, interventionists! Now the poor judgment of some people is inflicted on everybody!

Oh please, Americans (or at least the homeowning section of it) have been enjoying the benefits of the implicit guarantee for decades (in the form of lower mortgage rates), so it's only fair they bear the costs as well.

[Vanguard]

Great. So we can't have socialized medicine in the United States. But we can have socialized banking.

Viva la Republican Revolution!

[Zkribbler]

Originally posted by faded glory
I heard that when obama gets elected, all problems will be fixed and anytime a poor or middle class person walks past an ATM machine it will spit out endless dollars at them.

If you remember, the phrase is "We're the people we've been waiting for," not "the ATM is the people we've been waiting for." Obama has been campaigning for more personal responsibility.

Statements like yours don't even rise to the level of being uninformed. You're just spewing sewer water. If you pull your head out of your ass, you'll be able to smell the roses. :nodded: