Posted on 07/12/2008 5:43:39 AM PDT by Need4Truth
If section 8 folks come in that gives you or the Mrs and excuse to say, “Honey, let’s move to that nice house we saw the other day.” (and it keeps the economy rolling)
Right. Those who can leave, do leave. The demographic of neighborhoods shift. I’ve seen it first hand, it’s an interesting process.
“If we cannot do it at the ballot box....”
I suggest you reread my post #17......slowly this time.
looks like we will know monday
http://online.wsj.com/article/SB121577699220645703.html
After a week of near panic among shareholders of the two companies — and a stomach-churning day on Wall Street Friday — the next big test will come Monday when Freddie Mac is due to sell $3 billion of short-term debt. An unsuccessful sale could be a major blow to investor confidence. If the administration were to intervene, it could do so before markets opened that day, according to a person familiar with the deliberations.
>>>You’ll have to explain how China’s financial loss is harmful to the US for me to agree with you re .....economic sabotage.
Because agency debt has operated under a wink and a nod near guarantee from the federal government, the US might never be able to borrow from overseas creditors ever again... well, like Russia, we could borrow after a decade or two. At the same time, there would/might be a rush by all creditors holding all Treasury debt to unload it. Or at least sell off significant parts.
As the Chinese also hold a fair amount of US Treasury debt, they would think this Treasury debt might also be of “bad quality” and want to sell it. They might see this “welching” on Fanny/Freddie debt to be an act of economic war (they can be paranoid). Other central banks would get gittery. Then while the Chinese are nationalizing US interests in China, the US government would go belly up as it could not borrow money at stratospheric rates to pay their bloated payrolls. This means all other Treasury debt is worthless, and thus all related FDIC guarantees on momma’s bank account are worthless too.
Hope this helps.
I believe the federal government has only one option: keep Fanny/Freddie operating... on an infinite asset/equity ratio.
Unlike the case of other bankruptcies where the equity and debt holders should have been taken down to zero, the “wink and nod” guarantee by the federal government has caused us taxpayers a catastrophe.
Have you seen the numbers on their off-balance sheet guarantees? It’s quite large. Read this week’s Barron’s.
Apparently, the two combined operations have a 24:1 leverage ratio (a bank should have 10:1 I believe, but most don’t). When you throw in their off-balance sheet guarantees, the leverage ratio goes to 68:1. Currently these two companies OWN or GUARANTEE 45 percent of all mortgages in the US. This amounts to $1.7 trillion. So if only 1/4 of this is bad, Bush could kick out the illegals, take the savings from the states, and break even.
CitiBank is closing all of their Northern Nevada offices/branches. IndyMac is going bankrupt after they too learned about the risks of writing fraudulent mortgages. This thievery has been going on for decades and nobody ever goes to jail for it. Why should they clean up their act when the thieves can have their attornies write a new Bill to shove through the Congress with the threat that the entire financial system will collapse.
What you’re talking about is integrity and there isn’t a politician in the world who has any of it. They don’t know how to operate with it as a mandate.
When the doors to the World Bank are closed permanently that’s when the financial rules will be regarded as rules again. Until then, a wink and a nod will work fine, just like you said.
That would be Corporations registered there to escape whatever taxes are levied in their home country [one guess].
They'll probably wait till after the Olympics. Wouldn't want to lose those tourist dollars.
Americans are the top holders of both agency securities and treasury bonds. Americans hold more of these securities than all of the foreign country holders added together. They show up in the holdings of domestic pension funds, money market and bond mutual funds, trusts, foundations, corporate treasuries, et al. I have no doubt that agency security bond holders will be bailed out. These are the securities that are considered as good as treasury securities. Shareholders might, however, be zeroed out. There is also the possibility that holders of agency-backed mortgage backed securities will get zapped - the insurance backing provided by the agencies for mortgage payments might just cease to exist, although I have no idea what maneuver they might use.
My feeling is that regulators will do something similar to what they did to nurse Citibank back to health in the 1990's - see no evil on the balance sheet for some period of time, while rearranging senior management (i.e. firing the people responsible), instituting tougher lending requirements and charging borrowers more. It's not like there's any company out there able to take on the volume of mortgages that the agencies routinely guaranteed or put on their balance sheet as assets. No matter what anyone says, these quasi-governmental agencies are literally too big to fail.
Judging by the Chinese track record however, when it comes to the U.S., I believe we should take a cautious position when dealing with them.
The Chinese government has had a policy of economic espionage toward America for years, it has been documented time and again.
The Chinese government has been upgrading their surface ship, submarine, troop logistic, missile capabilities at an alarming rate...some are of the opinion to pose a direct challenge to the U.S.
The Chinese government corporate, government and military espionage has been documented for years.
The Chinese government has armed our enemies and created hot spots around the world to keep our military engaged constantly.
The Chinese government has continuously worked against us by way of veto on most UN votes regarding sanctions of rogue or dangerous regimes for years.
The Chinese military has probed our allies territory consistently for years.
My reasoning leads me to remain skeptical of anything the Chinese do when dealing with the U.S.
$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals.
Nuff said.
Ping to file.
Are Terrorists Manipulating our Markets?
By Frank Ryan - July 11, 2008
http://www.freerepublic.com/focus/news/2045429/posts?page=1
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