Please see Bernanke Grabs Plunger for U.S. Economy before reading.
That's gonna be $800 BILLION of YOUR MONEY, America!
To BAIL OUT a PRIVATE COMPANY!!!!
"Takeover seen easing loan crisis; Analysts say rescue essential; Mortgage rates may go down" by Robert Gavin and Kimberly Blanton, Globe Staff | September 7, 2008
The Bush administration's planned takeover of mortgage giants Fannie Mae and Freddie Mac should help lower mortgage rates, stem the slide of housing markets, and stabilize the US economy, analysts said.
The takeover, expected to be announced as early as today, represents one of the biggest government interventions into the private markets ever to survive the worst housing crisis since the Great Depression, analysts said.
That uncertainty, as well as billions of dollars in losses, have made investors reluctant to buy bonds that the two government-created companies use to finance mortgages, reducing the amount of money available for loans and raising rates for borrowers.
"The guy on the street is going get his mortgage cheaper," said Charles Calomiris, a professor at Columbia Business School. And for the US economy and markets, "this is the beginning of the end of the financial difficulties."
What a FUCKING LIAR!!!
All this AGENDA-PUSHING GARBAGE on the FRONT PAGE, too!!!!
Details of the takeover plan are incomplete, but Fannie and Freddie would be put into a conservatorship, which would replace current executives and boards, and put the companies under government control. They would continue to function as they do now.
It is unclear what the plan might cost, but if the government has to make good on the companies' bad debts, it could amount to tens of billions of dollars. Created by Congress to expand credit and homeownership, Fannie and Freddie are corporate hybrids, private companies owned by shareholders, but with public responsibilities, such as expanding affordable housing. Without them, mortgage credit and home sales would dry up and severely damage the US economy.
That has ALREADY HAPPENED!!!!
The US housing market continues to deteriorate. Last week the Mortgage Bankers Association said that 6.4 percent of US mortgages are delinquent because borrowers are behind on their payments. That is the highest rate ever recorded by the association. Meanwhile, the national unemployment rate surged to 6.1 percent in August, the highest rate since 2003, which could make it difficult for more Americans to meet monthly payments.
Yeah, but this action by the government is the end to all this, or so says the bullshit expert above. And LOOK at who is going to be bailed out:
The biggest losers could be the companies' shareholders because a government takeover may render common stock worthless. Boston money management firms and New York investment banks are the largest investors in both companies.
Fidelity Investments, based in Boston, is Fannie Mae's fourth-largest shareholder and Freddie Mac's 12th largest. Other major investors in the companies, according to federal filings compiled by Bloomberg, include Wellington Management Co. in Boston, and JP Morgan Chase, Merrill Lynch, and Citigroup in New York.
The conservatorship would be an interim step, with the long-term future of Fannie and Freddie to be decided later, analysts say. The options include returning them to their current status as part public, part private; fully privatizing them; or making them completely public. Those decisions will be left to the next Congress and administration.
At a rally in Colorado Springs, Colo., yesterday, Sarah Palin, the running mate of Republican presidential nominee John McCain, said of Fannie and Freddie, "They've gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."
Democratic nominee Barack Obama, speaking in Terre Haute, Ind., said, "These entities are so big and they're so tied into the housing market that it is probably true that we have to take steps to make sure they don't just collapse, because the housing market, which is already weakened, would be in even worse shape if we didn't take some steps."
Look, they already turned the race into a Palin vs. Obama match-up!!
--more--"
McCain-Palin Becoming Palin-McCain?
I never lie to you, readers.
