What? Fannie And Freddie May Not Sell Bad Mortgagaes After All?

Regulator says Fannie, Freddie might sell bad assets

By John Poirier

Reuters
Sunday, October 5, 2008; 2:43 PM

WASHINGTON (Reuters) – Fannie Mae (FNM.N) and Freddie Mac (FRE.N) may sell some bad assets to the Treasury Department but a decision has not yet been made, the regulator of the two mortgage finance companies said on Sunday.

“They are financial institutions that could sell assets,” James Lockhart, director of the Federal Housing Finance Agency, said during a C-SPAN television interview. “Whether they will or not certainly the decision has not been made.”

Lockhart estimated that between 2 percent and 4 percent of Fannie and Freddie’s assets are bad mortgages.

On Friday, President George W. Bush signed into law a $700 billion bailout package for the U.S. financial industry aimed at allowing Treasury to buy soured assets from institutions that have stopped lending to each other as well as individuals and businesses.

The two government-sponsored enterprises, which were seized by the government in early September, own or guarantee almost half of the country’s $12 trillion in outstanding home mortgage debt.

The first asset sale under the Treasury program is not expected to take place for at least four weeks, sources familiar with the financial rescue plan said on Friday.

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/05/AR2008100501056.html

THE BAILOUT Parts B & C – Congress Wants More Money & They Haven’t Even Voted Yet

Well the Spin is already starting -

The Pundits are admitting that this plan simply won’t work ….. without more cash -

The Pundits are now saying the Bailout Plan will need to be “supplemented” with additional cash (100’s of Billions) to “Recapitalize the Banks” and then funding will be required to provide “mortgage assistance” to that group of troubled homeowners who might get assistance under the “bailout plan” – the Bailout will only assist 1/2 the homeowners in the Country – those who have a mortgage with a bank or institution participating in the bailout (healthy banks and institutions won’t be participating) ……..

This remonds me of an old saying – “In for a penny, in for a pound” (As in the British pound – Guess I should change the saying to “in for a penny, in for a dollar”). The point being, they’ll be back to us in less than a month for more money - telling us “you don’t want to waste your first ‘investment’ of a trillion dollars do you?”.  

There isn’t just one more shoe to drop – there are at least two ….. and we haven’t even been given a preliminary price for these new shoes.

Remember – there is no guarantee that the first portion of the  “Bailout” will work.

Contact your Congressperson and tell them to Vote NO today. 

Contact Your Senators Here:  http://www.emailyoursenator.com/senators.html  Click on your Senators, Select the Contact Folder and then  click on the email address.

Contact Congresspeople: http://www.house.gov/zip/ZIP2Rep.html You’ll need your zip  code

VIDEO: The Bailout & Fannie Mae – FOLLOW THE MONEY

VIDEO: Small Banks Are Still Lending – Credit On Main Street – So Says Banking Association

See The Video Here: Select “Small Banks Still Lending” Video: http://www.foxbusiness.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3126969&referralPlaylistId=search|small%20banks

This is a second video on Small Bank lending – This Banker notes his bank is lending – but he supports the Bailout – Then why all the scare tactics.

FDIC Deposit Increase – Just Another Tax Increase, Says Bill Isaac – Former FDIC Chairman

The FDIC’s “Insurance Fund” Myth

By: Vernon Hill   Thursday, September 11, 2008 10:02 AM

When FDIC head Shelia Bair says her agency might have to bolster the FDIC’s insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there’s an actual FDIC fund in need of bolstering.We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government’s general coffers for “spending . . . on missiles, school lunches, water projects, and the like.”

The insurance premiums aren’t really premiums at all, therefore. They’re a tax by another name.

Actually, it’s worse than that. The FDIC, persisting in the myth that its fund really is an insurance pool, now proposes to raise the “premiums” it charges banks to make up for the “fund’s” coming shortfall. The financially weakest banks will be hit with the biggest tax hikes.

Which makes absolutely no sense. You don’t need me to tell you the banking industry is on the ropes. The last thing it needs (or the economy needs, for that matter) is an expense hike that will inhibit banks’ ability to rebuild capital, extend new loans, or both. If the FDIC wants to raise its bank tax once the industry has recovered, I suppose that’s fine. But to raise taxes on the industry now is perhaps the dumbest thing the agency can possibly do. At the margin, the FDIC will be helping bring about more of the failures it says it wants to prevent.

But this is the government we’re talking about, so logic goes out the window. First, the FDIC insists its mythical bank insurance fund exists, when it really doesn’t. Then the agency does what it can to run the imaginary fund’s finances straight into the ground. Your tax dollars (sorry, “premiums”) at work. . . .

http://www.istockanalyst.com/article/viewarticle+articleid_2603550.html

The US FDIC Insurance Increase – Ireland Announces Insurance on All Deposits

LA Times

Bailout fever: Ireland guarantees all bank deposits, debts

The biggest surprise: The Irish government guaranteed all deposits and debts of the country’s major banks, one day after the Irish stock market plummeted 13%, nearly twice the decline of the Dow Jones industrials.

“We have to create confidence,” Finance Minister Brian Lenihan said on RTE Radio, according to Bloomberg News. “We can’t bail out a particular bank. That wouldn’t be right. What we have decided to do is give a general guarantee that the banks can lend in security and safety.”

mcauleysworldweblog: Irish Banks have received a rush of American cash in recent weeks as Americans have transferred money to Irish Banks. There are commentators who suggest the move by the Irish Government is aimed at keeping the American funds in Irish Banks. The Irish economy has been booming for 10 years. The Irish Government has a pro-growth, low tax, business environment. Business taxes in Ireland are approximately 11%. 

http://latimesblogs.latimes.com/money_co/2008/09/after-congress.html 

Read About The Myth Of The FDIC Insurance Fund Here: By Bill Isaac, Former FDIC Chairman –  http://mcauleysworld.wordpress.com/2008/10/02/fdic-insurance-an-accounting-myth-not-a-fund-bill-isaac-former-fdic-ch/

Taxpayer Alert – The Bailout – What Happens In January

WHICH DEMOCRAT IS PROMISING HER CONSTITUENTS FREE HOUSES COME JANUARY?

Steve
stevem_brown@hotmail.com | 174.153.210.108

I am total agreeing with you in all respects, except for one. There is more ‘debt’ that is not being disclosed from the ‘financial intuitions.’ The anticipated $850 Billion Dollars is just the icing on the cake. I speculate that it will cost the tax payers more to the tune of $1.8-2.5 Trillion Dollars.
Thanks for the insight, looking forward to your blog after the vote.

From Analysis Of Senate Bailout Bill – To Be Considered By House On Thursday, 2008/10/01 at 11:27 PM

mcauleysworld
markdaoust@sbcglobal.net | 69.209.137.126

Steve – I agree -
If you want my estimate of where the “total” might go once the banks can start dumping their bad debt on the public – on Joe Taxpayer – my guess is $7 Trillon – there is $14 Trillion in “late” loans around the world.

Then we have an added unkown – The Liberal Democratic Congress. Did anyone else see Rep Maxine Waters (One of the infamous Fannie Defenders) on Fox Business News last night – Live from the Capital – Representative Waters plans on getting involved further – after the first of the year – when “we have a Democratic President and Congress”. Her plan – forgive the mortgages of her constituents and let them keep their Houses for free”. Free for her Constituents – The Working taxpayer will be picking up the tab.

From Analysis Of Senate Bailout Bill – To Be Considered By House On Thursday, 2008/10/02 at 6:00 AM

CALL YOUR CONGRESSPERSON AND TELL THEM TO VOTE NO

Contact Your Senators Here:  http://www.emailyoursenator.com/senators.html  Click on your Senators, Select the Contact Folder and then  click on the email address.

Contact Congresspeople: http://www.house.gov/zip/ZIP2Rep.html You’ll need your zip  code

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