Government not expected to help more companies »
Posted by: STONERS 1 month, 2 weeks agoThe U.S. government is signaling it won't throw a lifeline to struggling financial companies except for mortgage linchpins Fannie Mae and Freddie Mac marking a shift to a new and potentially more volatile phase of the credit crisis.
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STONERS1 month, 2 weeks ago
"The credit crisis has obviously entered into a new phase the government has one bailout left in them, and this is it," said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion."
"One consequence of Freddie and Fannie is that other firms are allowed to go under," he said. "If you couldn't get your act together after four months of unprecedented financing terms, maybe you don't deserve to be thrown yet another lifeline."
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saintetienne1 month, 2 weeks ago
"We are a socialist country with a lot of money spent on welfare. Only it's for corporations rather than individuals."
Better it be spent on corporations, who will turn around and re-invest, grow their companies and provide jobs, goods, services, technology and a tax base.
You give money to an individual and they turn around and spend it on liquor, cigarettes, plasma TVs and fast food.
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Sabretooth1 month, 2 weeks ago
Silly me, i thought American's hated socialists based on the comments i have read here. Welcome to the club of socialist countries. I also understood that if someone was to default on their mortgage that it was just fine since they were too stupid to live within their means, can you say flip flop?
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quackpot1 month, 2 weeks ago
The deal is being financed by the Federal Reserve Bank of New York.
Usually, the Fed. issues newly printed money in exchange for Treasury notes, thereby decreasing the value of the dollar and also lowering interest rates. The effects of this are seen in how far the dollar has fallen relative to the Euro under the Bush Administration.
In this case, the Fed will be taking paper representing mortgages. This may be somewhat better than in the Bear Sterns Bail out when the Fed took Wall Street Paper in exchange for the newly printed dollars.
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saintetienne1 month, 2 weeks ago
"I am against the government bailing out any company."
Absolutely, Wolfie.
Look what happened the last time the government "helped out" the banks and "took charge of" economic affairs.... It took a World War to pull us out of the unprecedented damage caused by the one-two punch of Hoover's idiotic meddling and Roosevelt's stupefying expansion of government, the likes of which we're STILL mired in today (Social Security, Welfare, government bureaucracy, etc.)
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nostalgia1 month, 2 weeks ago
Here is an interesting article:
Fannie and Freddie have around $5 trillion in liabilities coming due over the next few years. The mortgages and mortgage-backed securities on their books constitute about half of the US mortgage market. They were created by the government, and they can borrow freely at low interest rates because creditors know that the government will not let them collapse. This implicit subsidy has allowed them to grow too large, and now the taxpayers are in jeopardy of having to make good on all their debt.
The housing bill that passed the Senate Friday would create a new regulator for Fannie and Freddie that could force it to raise capital and could take over the companies if they become insolvent. But the bill would also raise the limits on the size of the mortgages that Fannie and Freddie are permitted to buy, allowing them to buy.
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nostalgia1 month, 2 weeks ago
Congress should be winding Fannie and Freddie down, not expanding the scope of their activities.
But if the credit markets lose confidence in Fannie and Freddie, even a capital injection of $100 billion or more isn't likely to save them. In that case, it might be necessary for their new regulator to put them into receivership and restructure them. This could take place without Congress having to pass a resolution explicitly guaranteeing all $5 trillion of the GSEs' liabilities. That dreaded scenario would double the size of the public debt and drive the dollar to new lows.
http://article.nationalreview.com/?q=MmVmZjI2MD...
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saintetienne1 month, 2 weeks ago
"That dreaded scenario would double the size of the public debt and drive the dollar to new lows."
Leave it to the expansion of government to drag the economy down even further.
Has no one learned ANYTHING from the Great Depression of 1929-1940??
Now Obama wants to step into office and do exactly what FDR did in 1933 - take control of the banks, expand the role of government, tax Americans, punish businesses and grab profits from the oil companies to "re-distribute" to the "needy".
You think the economy is soft now, people? Wait'll "Obama-nation" kicks in.
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unome21 month, 2 weeks ago
The current economic crisis is being engineered by the federal Reserve in an effort to bring middle class Americans to a low enough level that they will believe that the North American Union and a new currency 'the Amero" will somehow save their bleak economy.
Get ready for the New World Order.
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