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POPSFannie Mae & Freddie Mac not the cause of the subprime mortgage meltdown Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble. During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.
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POPSWhy no outrage over foreclosures? Why do we automatically assume the buyers are at fault? Did they risk other peoples' money? Did they know we were in a housing bubble? Was it explained that the ARM would default if their home value declined? Why do we let professional sales-people make money leading people into the largest purchase in their lives without issuing precautions that first-time homebuyers often do not understand? And why is the homebuyer the loser, rather than the shyster that sold them a loan they could not possibly have understood? Why do we let them take our homes away?
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POPS Oil Outlook Clouds Russia’s Economic Future That could trigger a vicious circle of falling income and investment, as production gets more expensive in Russia's aging fields. The era of record profits from oil and gas is over - that's according to Russia's Finance Minister Alexey Kudrin. 2008 is likely to be the year of peak oil and gas production in the country. The big oil companies are cutting investment in new projects. Russia has received up to $1 Billion a day in oil revenues in recent years, and the country's budget and economy remain highly dependent on hydrocarbon earnings. The world financial crisis and recession has triggered big falls in the world's oil price. That will significantly affect the Russian budget, according to Mikhail Kroutikhin, partner at Rusenergy.
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POPSWhy Would Warren Buffett Stoop So Low?
The market still works! With all due respect to Buffett, nobody has yet made a compelling case to me that there is, in fact, a crisis that extends much beyond overleveraged banks with bad business practices. There's a simple fact lost among all of this fearmongering and jawboning about how bad things could get if the government doesn't throw $700 billion (or more) at failing financial institutions. The stock and vulture-capital markets are still generally working, in spite of the cries from politicians and failing speculators to the contrary. The market also has a really good mechanism to help struggling financial companies get money. It's called "price," and it's still functioning. You can see it in action by looking at the one-year CD rates that various banks are offering to entice people to deposit money with them. When the people lobbying the hardest for a bailout are those who stand to benefit from it, you have to ask whether their motives are altruistic or self-serving.
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POPS"Blueprint For Change" Opens with a Lie. Too Good to be True ought have you all the more vigilant. The Marxist agenda played out .And all wrapped up in a bow which plays on peoples deepest insecurities: The fear of what may be inside them. Young,well-to-do suburban whites who never went across the railroad tracks in their life MUST prove to themSELVES that they are not racist. So - no matter what - ignore the questions, shut down the intellect (while claiming superior intellect) and , "Oh my God, never let it be said that (tsk) I, of all people - could be racist. Hey, look, I voted for Barack Obama."
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POPSFour Great Companies on Sale You really have to wonder if all these finance mags and newspapers are just trying to convince people to buy in order to get things moving again. Likewise I suppose if things go bad they have no magazine. Some of the readers comments were interesting.
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POPSThe Obama Sell Off I know that the reason I moved everything I had out of the markets is that if Obama gets in he's going to destroy a minimum of 1/7th of the economy with his medical idiocy. He's also going to destroy investment with his tax increases and who can tell where the next huge failure will come from with that kind of uncertainty. Better to sit on the sidelines and see what happens than try to guess exactly what the Democrats might destroy next.
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POPSFrom Empire to Democracy
(c0nt.)There is a much better solution to the current financial crisis. But it requires discarding what has been conventional "wisdom" for too long: that government intervention in the economy ("big government") must be avoided like the plague, because the "free market" will guide the economy towards growth and justice. Let's face a historical truth: we have never had a "free market", we have always had government intervention in the economy, and indeed that intervention has been welcomed by the captains of finance and industry. They had no quarrel with "big government" when it served their needs. It started way back, when the founding fathers met in Philadelphia in 1787 to draft the constitution. The first big bail-out was the decision of the new government to redeem for full value the almost worthless bonds held by speculators. And this role of big government, supporting the interests of the business classes, continued all through the nation's history. The rationale for taki
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POPSFannie/Freddie Trouble Seen 9 Yrs Ago
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black
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POPSU.S.Treasury's Kashkari to Lead Bank Bailout Office (Update1) ``We need to think through what's the best for securities, for loans, to help strengthen the balance sheet of the institutions.'' Anthony Ryan, the Treasury's acting undersecretary for domestic finance, said in an interview today on CNBC. ``We are focusing on the broader issues, the mortgage- related assets.'' Senate confirmation is required to fill the position for which Kashkari will be nominated. The Treasury hasn't specified the length of Kashkari's tenure, or whether the White House would nominate him officially. The Bush administration remains in office until January. Ben Dover, "Dewey Screwem and Howe" via tom mcguire
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POPSBernanke, Paulson, Trichet May Act to Unblock Lending (Update1)
Rates are also surging in the commercial paper market that many U.S. companies use to finance their day-to-day operations. Yields on overnight U.S. commercial paper jumped 0.94 percentage point to 3.68 percent. `The Federal Reserve must now act as a clearing house'' for banks and ``must also take another bold step: outright purchases of commercial paper, said Bill Gross, manager of the world's biggest bond fund at Newport Beach, California-based Pacific Investment Management Co. Europe's Dow Jones Stoxx 600 Index having its steepest intraday decline since 1987 and emerging markets, until now the locomotives of the world economy, hit particularly hard: exchanges in Russia and Brazil halted trading. One less complicated step would be for central banks to lower rates in concert. Traders are betting that the Bank of England will lower rates at a meeting this week, and that the Fed will cut its benchmark by at least half a point at or before an Oct. 28-29 gathering.
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POPSFinancial joke... I guess just because you make 10's of millions in salary -- well, you really shouldn't be expected to actually KNOW about the financial health of your company? That's run-away capitalism for you: get all the bene's without the responsibility...
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POPSThe Love of Money is the root of all Evil The old saying goes that if it appears to be too good to be true it is. Easy credit has been the ruin of our financial houses. People have overextended in many areas and housing was just the next obvious liberal pursuit. Conservatives teach that less is more and learning to live responsibly in all areas of life is the best approach. Liberals would have us believe that you can have it all and at someone else's expense. The bible teaches that the love of money is the root of all that is evil.
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POPSBigPicture=Acorn+Fannie+SubPrimeGoneMad 1993,Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market. "We have to use every means at our disposal to end discrimination and to end it as quickly as possible," Clinton's comptroller of the currency, Eugene Ludwig, told the Senate Banking Committee in 1993. Wall Street eagerly sold the new mortgage-backed securities. Not only were they pooled investments, mixing good and bad, but they were backed with the implicit guarantee of government.
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POPS Main Street vs Wall Street While this is unpleasant for those who work in the field, it is necessary to achieve better balance in our overall economy. We could see a large reduction in the number of firms and the number of people employed in financial services without impairing households’ ability to invest safely or obtain credit that they can use prudently. Rogoff views the financial bailout as akin to a tariff for the steel industry or a subsidy for the auto industry. It is testimony more to the power of the financial industry’s political connections than to its role in the economy. Banks are important, yes. But so are manufacturing firms and software companies. When the Internet bubble popped, we did not send government aid to the technology industry, which has since recovered nicely following a shakeout. The other claim that is made on behalf of the bailout is that Treasury will make a profit for taxpayers by buying distressed mortgage-related assets.
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