Seems the government is set to take both Fannie Mae and Freddie Mac into conservatorship---nationalizing the companies. The government should IMHO, immediately and orderly sell off the assets of these companies and close them down. They are not needed and their sort of quasi government status are part of the reason we are having the mortgage crisis. They have been used by politicians to back stupid mortgages with little or no money down--loans that purely private companies would have never made.
McCain is clear that this is his intention if he is President saying
Sen. John McCain, the Republican nominee for president, has said his goal is to make the companies “go away” and to push for regulation that “limits their ability to borrow, shrinks their size until they are no longer a threat to our economy and privatizes and eliminates their links to the government.” Sen. McCain supported giving Treasury the authority to backstop the firms but has said any use of taxpayer funds should be combined with an ouster of management and a ban on lobbying by the companies.
No doubt credit will be tightening further.
I was very vocal about FED and Bernanke failing to protect the dollar but now it appears Bernanke was right not to raise rates. The dollar is strengthening and inflation is easing mainly due to the collapse of housing cost in states like California.
Let this be a lesson to future Congresses---stay out of private business!!!
I pretty much agree with you, particularly because of the size of Fannie and Freddie. I think that part of their models could be used in making loans by other institutions - there is a need for people who have limited credit and good, stable employment to be able to get a home.
One can imagine how well off we would be, as a country, if the idiotic home loans weren’t made to those who were simply looking to buy a house to live in - there’s a lot of affordability when all you have to pay for is a <$150,000 home at under 7% interest for 15-30 years.
[T]he Federal Deposit Insurance Corporation (FDIC) arranged for the takeover of the 11th failed bank of 2008 on Friday.... the FDIC likes to close banks on Friday after hours so they can reopen as branches of the acquiring bank on the following Monday morning. According to the Associated Press, the bank in question is Nevada’s Silver State Bank.
Nevada State Bank of Las Vegas will take over the insured deposits of Silver State—which had $2 billion in assets and $1.7 billion in deposits at the end of June. AP reports that “[Silver State’s] branches will reopen Monday as offices of Nevada State Bank in Nevada and National Bank of Arizona in Arizona.”
John McCain’s son, Andrew, who is also CFO of his mom’s beer distributorship, “sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, starting in February but resigned in July citing ‘personal reasons.’ Andrew McCain also was a member of the bank’s audit committee, responsible for oversight of the company’s accounting,” according to AP.
The failure—which was caused by “poor-quality loans primarily related to real estate development”—will cost the FDIC deposit insurance fund between “$450 million [and] $550 million,” according to AP. Silver State’s motto was “When the casinos treat you poorly, let Silver State treat you like a valued customer,” according to its website.
McCain’s campaign on Saturday called for the eventual elimination of Fannie and Freddie, complaining they have become so large and poorly managed that they pose a risk to the broader financial markets.
Senator McCain will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government,” said Doug Holtz-Eakin, a senior McCain policy adviser.
Obama, too, has been critical, complaining that Fannie and Freddie should either operate as public entities without profit, or as private companies that won’t be rescued if they fall into trouble.
McCain’s running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had “gotten too big and too expensive to the taxpayers.” The companies, however, aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.
McCain’s campaign on Saturday called for the eventual elimination of Fannie and Freddie, complaining they have become so large and poorly managed that they pose a risk to the broader financial markets.
Senator McCain will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government,” said Doug Holtz-Eakin, a senior McCain policy adviser.
Obama, too, has been critical, complaining that Fannie and Freddie should either operate as public entities without profit, or as private companies that won’t be rescued if they fall into trouble.
McCain’s running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had “gotten too big and too expensive to the taxpayers.” The companies, however, aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.
The banks were private in ownership but issued bonds that carried quasi government guarantees and had access to cheap capital.
The banks were often times at the whelm of Congress given their reliance on the government.
They should be shut down in an orderly manner. Private funds would step up to provide the financing for home mortgages just as they do for all other types of lending and insurance. You can bet those private investors will discount those shoddy loans Freddie and Fanny made.
McCain’s campaign on Saturday called for the eventual elimination of Fannie and Freddie, complaining they have become so large and poorly managed that they pose a risk to the broader financial markets.
Senator McCain will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government,” said Doug Holtz-Eakin, a senior McCain policy adviser.
Obama, too, has been critical, complaining that Fannie and Freddie should either operate as public entities without profit, or as private companies that won’t be rescued if they fall into trouble.
McCain’s running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had “gotten too big and too expensive to the taxpayers.” The companies, however, aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.
The banks were private in ownership but issued bonds that carried quasi government guarantees and had access to cheap capital.
The banks were often times at the whelm of Congress given their reliance on the government.
They should be shut down in an orderly manner. Private funds would step up to provide the financing for home mortgages just as they do for all other types of lending and insurance. You can bet those private investors will discount those shoddy loans Freddie and Fanny made.
IB, you’re right on the money with this. no pun intended
John McCain’s son, Andrew, who is also CFO of his mom’s beer distributorship, “sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, starting in February but resigned in July citing ‘personal reasons.’ Andrew McCain also was a member of the bank’s audit committee, responsible for oversight of the company’s accounting,” according to AP.
The failure—which was caused by “poor-quality loans primarily related to real estate development”—will cost the FDIC deposit insurance fund between “$450 million [and] $550 million,” according to AP. Silver State’s motto was “When the casinos treat you poorly, let Silver State treat you like a valued customer,” according to its website.
That apple (Andrew) didn’t fall far from the tree, did it? McCain is certainly the man to deal with this crisis, given all of his savings and loan experience.
The problem has been the socialist philosophy of both R’s and D’s that everyone has a “right” to own their own home - wether they can afford it or not. Like the “right” to free health care, a college education, etc.
Please show me the article or amendment of the Constitution that guarantees these “rights”. It is the same old ploy of the politicians buying our votes with out own hard earned money.
The real question is policy, not the constitution. If you pass a law that says every veteran can have a headstone, that veteran’s family can properly feel that it has a “right” to call up the VA and find out how to apply for the headstone. There is an argument that public education and financing of insurance can make for a wiser and healthier country. I’m not saying the Constitution requires these, for heaven’s sake, I’m saying they could be good policy. Where enacted, I have nothing against people calling them a “right,” (which term they might apply anyway to Medicare after age 65, or state elementary and high schools). They do have a right that laws be applied equally. Whether the programs should be broadened is a valid policy question.
