Housing Crisis

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Fannie and Freddie to be Taken Over by Feds: Reports

After the usual BS assurances by federal officials and top management at the twins of doom that Freddie Mac and Fannie Mae had sufficient operating capital reports surfaced late Friday that the day of reckoning was near. Freddie and Fannie may be taken over by the Federal Government as soon as this weekend.

The take over would be the largest financial bailout in America’s history and probably pretty much wipe out the common stock shareholders. The take over would add about six trillion dollars to the federal debt, not a very reassuring figure. In fact it may well bring into question the very credit worthiness of the United States government and add to the cost of all government attempts to raise money in the future.

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6Sep2008 | taipan | 0 comments | Continued
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Fannie Mae and Freddie Mac Shares on Their Way to Zero

Fannie Mae and Freddie Mac made the giant crazy sized long running American real estate bubble all possible. Released by congress from capital-ratio requirements and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages, which kept home mortgage financing flowing to a lot of people who had no ability to repay the mortgages. Today, Freddie or Fannie finance more than 80% of all new mortgages in the United States.

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22Jul2008 | taipan | 0 comments | Continued

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