I see by the morning paper that we, the taxpayers, are going to buy
Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
according to the article.
Why are we bailing out companies that knowingly gave mortgages to people
who couldn't afford them? If a mortgage holder has been defrauded by a
company, he should have legal recourse. If a company has been defrauded
by a mortgage holder, likewise. Other than that, let them eat cake.
Just watch - I'll bet the bailout goes into the pockets of some fat cats
on Wall Street. It's the S&L bailout all over again.
Are we on the same side this time, Doug and Tim?
You do realize that Fannie May and Freddie Mac aren't really private
companies. They are "Government Sponsored Enterprises" that were designed
to provide low-income loans (i.e., loans to people who more than likely are
not going to be able to pay them back). In addition to poor business
management, it appears that these two federal government enterprises are
also being used to channel money to politically oriented groups:
One of the previous overseers of Fannie May was forced to resign because of
This isn't a federal bailout of private institutions. This is paying the
consequences of another set of tender-hearted fuzzy thinking on Congress's
If you're going to be dumb, you better be tough
You don't seem to understand.
Here's how the game is played
You "privatize" profits.
If there's a profit
- it goes to the "investors"
You "socialize" losses.
If there's a loss
it's paid for by the tax payer.
Why we don't crucify
- and I mean
upside down, naked, crown of
thorns crucifiction (sp?)
during the Super Bowl at least
a few of these greedy bastards
still amazes me.
Let "The Market" have its way
and it'll solve all problems
Mr. Friedman? Have you studied
history - at all?
So this is just another installment
in a very old story - that has no
end in sight.
They are hungry?
Let them eat cake!
Have you lost your head?
The problem with your rant on this topic is that both Freddie Mac and
Fannie May are GOVERNMENT agencies. Fannie May was started during the
Roosevelt administration. The "fat cats" of which you speak are former
government employees who lined their pockets knowing the government would
bail out the agencies. People who cashed in? Franklin Raines to the tune
of $52M, Jamie Gorelick (yep the one who helped enable the 9/11 attacks by
erecting the "wall" between the CIA and FBI, preventing sharing of
information): $15M, James A Johnson: $1.9M. There were plenty of warnings,
but because this is a quasi-government organization, nobody was willing to
take on the political fallout. Imagine the howls of outrage over those
evil Republicans going after agencies that assure low-income people of
loans. This information can be found in stories in the Washington Post and
If you're going to be dumb, you better be tough
You're both of the mark. This crisis was manufactured the day the banks
decided on the idea that you can safely lend to people who may be unable
to repay. And almost everyone happily and profitably promoted that idea,
including government agencies and regulators. It's as simple as that.
In a real free market system the banks and the people who borrowed would
all go out on the street in their birthday suits. Some rich guys would
profit because they could buy the lost properties at 5 cent to the $, sit
on them until the economy recovered, then sell them at 20-fold profit.
In reality, too much harm would come to everyone (the economy as a whole)
if that script were to be followed. So, now we all have to suffer
somewhat by rescuing at least some of the institutions and private
individuals. That was the way it happened (for the god of most) during
the savings and loan crisis, and that should (IMO) happen now.
What is the lesson? If it sounds too good to be true, it probably is too
good to be true. Ponzi schemes work only so long. Should someone be
prosecuted? Yes! But I am not going to decide who should be.
On Sat, 06 Sep 2008 22:46:00 -0700, Mark & Juanita wrote:
I've heard them described more as quasi-governmental entities. But
regardless of that, I suspect the buyout will also protect those
private entities who purchased the mortgages that were securitized.
I doubt any of it will "trickle down" to the people who took out those
liar loans. Even though it takes two to tango :-).
They should get whatever they are owed by contract (as should anyone
who enters into a contract) and/or what their stockholders deem
appropriate. (I'm assuming here that there has been no fraud or
malfeasance on their part.)
The constant whining we hear about "overpaid executives" is mostly
bogus and is nothing more than class envy. Most executives work
for corporations that have stock holders. Those stock holders
can vote execs' compensation via the board they elect. The
reason execs make what they do is because that is the market rate
for a fairly rare skill (relatively speaking, say, compared to
someone to work on an assembly line).
Tim Daneliuk firstname.lastname@example.org
Actually. Larry, from what I have read, the Fed. Govt. passed a law
(either G.H.W. Bush and/or Clinton) that all lending institutions MUST
make a percentage of all mortgages in the sub-prime category. The
lenders obliged, and, after having made the loans, then bundled them up
and sold them off on the financial market, implying that they were
perfectly good. After the sub-prime crash, it's all coming back to
haunt them. In a way, it is all the Govt's fault, so maybe they are
obliged to bail out the institutions involved. Some of the details may
be a bit murky, but this is the gist of what I have read so far. We'd
all be a lot better off if the Govt. would just stay out of our
affairs. This type of legislation is simply none of their business.
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