Posted on 09/08/2008 9:00:20 PM PDT by Dr. Marten
Has America created its own variety of communism with the U.S. Treasury Department’s bailout of two beleaguered government-sponsored enterprises (GSEs), Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE)? According to Rogers Holding CEO Jim Rogers, the answer is yes. “America is more communist than China is right now,” Rogers told CNBC Europe’s “Squawk Box Europe” September 8. “You can at least have a free market in housing and a lot of other things in China. And you can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters." Rogers, known for launching the Quantum Fund with left-wing heavyweight George Soros, said the bailout was not benefiting homeowners or helping average citizens improve their standing for a home mortgage. “It’s not bailing out the homeowners who are in trouble, by the way,” Rogers said. “It’s not bailing out people who want a mortgage – it’s just bailing out financial institutions. This is not my idea of the way things are supposed to be, but if that’s what America wants, you know, it can elect people who are going to do it. I think it’s a mistake.” The Rogers Holdings CEO had little confidence that Democratic presidential nominee Sen. Barack Obama, Ill., or Republican vice-presidential nominee, Alaska Gov. Sarah Palin, would be able to do anything to steer Fannie or Freddie on a more stable path. “This is a big huge mess and neither one of them has a clue as to what to do next year,” Rogers said. “Bank stocks around the world are going through the roof, that’s because they’ve all been bailed out. You don’t see the homeowners in Kansas going through the roof because they’re not being bailed out.” Rogers had previously called for Fannie and Freddie to be allowed to go bankrupt. “They should not be bailed out,” he told “Worldwide Exchange” July 15. “This is outrageous. Who are these people who are taking our money and doing this and ruining America?” “Let the patient go bankrupt,” he said. “We have courts in America; they will be reorganized.” Fannie Mae and Freddie Mac were “wove a mantle of invincibility” through lobbying according to a September 8 Wall Street Journal “Deal Journal” blog post. According to the Journal’s Heidi N. Moore, the mortgage giants had $170 million in lobbying bills in the past decade and spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms. Earlier on September 8, CNBC “Mad Money” host Jim Cramer called the bailout “a homerun plan” on MSNBC’s “Morning Joe.”
“Rogers, known for launching the Quantum Fund with left-wing heavyweight George Soros..”
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OK, now I understand who the Commies are and who the Commies are not. Thanks for the article clarifying.
I dont think anyone is happy with the bail out, but doing nothing would be catastrophic to the markets. Also, many individuals have shares of fannie and freddie in their 401’s or retirement accounts. So it would be a double whammy bankrupting the markets and individuals.
They have common shares? Right now each share is worth less than $1, down almost 90% today. So Hank's plan didn't do much for them, did it?
“Also, many individuals have shares of fannie and freddie in their 401’s or retirement accounts. So it would be a double whammy bankrupting the markets and individuals.”
Shareholders who are still in have committed a serious error. At the *very latest*, when Treasury announced the tenative plan to do what they did yesterday about month ago was the last call for survival.
I agree no one’s happy but this sets a dangerous precedent. Someone is bound to argue, “why didnt the govt bail out the ailing airline industry?” The markets should be able to rebound after the elections, and not all 401K’s are tied to FM. The govt should stay out but now the govt’s actions will open doors for more hand-outs.
“The Rogers Holdings CEO had little confidence that Democratic presidential nominee Sen. Barack Obama, Ill., or Republican vice-presidential nominee, Alaska Gov. Sarah Palin, would be able to do anything to steer Fannie or Freddie on a more stable path.”
What’s McCain? Chopped liver?
“What’s McCain? Chopped liver?”
Didn’t you know? It’s Obama v Palin now. McCain’s at the grown-up table. Obama’s so egotistical he doesn’t even realize that the more he identifies himself with the VP candidate, the more voters will too.
U.S. seizes Fannie and Freddie
CNN | 9/7/2008 | David Ellis
Posted on 09/07/2008 9:02:41 AM PDT by CodeToad
http://www.freerepublic.com/focus/f-news/2076709/posts
Fanny, Freddie, and Obama (They go way back)
The American Prowler | 9/8/2008 | The Prowler
Posted on 09/08/2008 12:13:06 AM PDT by nickcarraway
http://www.freerepublic.com/focus/f-news/2077144/posts
Fanny and Freddy have been overstating their assets. The world discovered this and now they can’t raise money for mortgages at reasonable rates. Those rates have to be passed through to the homeowners. By taking over the institutions the mortgages are now backed by the US government. This might bring down homeowner rates, but it could also raise Treasury rates because of the huge amount of money concerned.
But isn’t communism supposed to distribute wealth to the little guy? Thgis is kind of like taking money from the middle class and giving it to the corporate class.
People can always sell their shares and buy other stocks or investment vehicles.
Here is my take on the whole financial mess:
Plenty of stupidity all the way around. The buyers who lied about their incomes were stupid. The lending agents who encouraged/ outright told buyers to lie were stupid. The banks who didn’t verify anything were stupid. The bank’s investors who packaged the mortgages together, called it “equity” and borrowed against it to issue more mortgages were stupid. The investors who bought derivatives too complex for human comprehension were stupid. The ratings firms who blessed the whole flea circus with AAA ratings were stupid. And regulators were stupid for not stopping it much earlier (even congress was stupid for pushing hard for banks to make more high-risk mortgages).
Philosophically, I believe very strongly in a free-market economy. And that means that I believe stupid people and corporations should lose their money, homes, corporate assets, etc. So philosophically, let the buyers lose their homes, the agents lose their jobs, the banks end up with a house worth 1/3 of the mortgage, the investors lose their shirts, the ratings agency lose their credibility, and various corporations declare bankruptcy and/or merge.
But I can accept that I am wrong. I can accept the claim that this would devastate the entire US economy, drive us into recession, and cause Republicans to lose more seats in the next election.
The government can intervene in several ways, but if we are talking about a government ‘bail-out’, then that explictly means that the government is going to give (large) sums of money to entitites that have done nothing to deserve it.
And if we do that, we have two choices of targets — we can give money to the stupid lying homebuyers. This would allow them to continue paying their mortages, avoiding foreclosure, which means the bank has a valuable steam of payments instead of a less valuable house. Fewer fire sales on houses means a more controlled rate of devaluation, making non-distressed home-owners happier if they have cause to sell a house. And the various investments will likely pay at least face value until they are properly closed out.
Alternatively, we can give money to the stupid lying bank investors. That way, when they foreclose on a house worth only 1/3 the mortgage and default on the bogus investment offers and crash the housing market encouraging more people to default on under-water mortages, they won’t quite go out of business.
If we are to intervene at all, I’m not at all sure that the bail-out money is appropriately targeted. I see no principled argument explaining why investors but not homeowners should be rescued.
Typically I am against any kind of bailout, however I believe that this presents a great opportunity. The Democrats made a big tactical mistake by giving the Bush Admin the authority to take over Fannie and Fred. The Demoncrats didn’t believe that Bush would go this far. Fannie and Freddie have been operated as a Democratic slush fund for the last 25 years and this takeover will end that.
This is our best chance at cleaning out this nest of corruption. If McCain wins this election look for Steve Forbes plan to be implemented to break F&F into 12 regional private companies.
People who should have done something did nothing already and that's why we are where we are. There were signs and financial people warning of this 2 years ago, look at the WSJ.
There should be investigations done and check who profited from this. I don't care if it's a Republican or Democrat, they need to be held accountable. People need to put party aside on this issue.
Everyone at the highest level should be prosecuted. How it managed to go on this long is mind boggling. I have some money invested in mutual funds with T Rowe Price and they were avoiding the mortgage markets 3 years ago because something didnt seem right.
How sweet of the US taxpayers to bail out the mortgage lenders, world bankers, middle east investors, and lobbyists. Surely they don’t think they will now own a piece of our action. Some of them will probably be looking for some dividends. LOL Then there will those who think their foreclosers will be stopped thanks to this bailout. HAHAHAHAHA!
Since the US taxpayers are already trillions in debt to world bankers, with the interest clock ticking like a time bomb, what’s a few more billion here or there? All we gotta do is print more money right? Keep those presses rollin Dr. Federal Reserve...ergghh, I mean world bankers.
Catchya on the French Riv.next summer boys. My yacht is being remodeled. I anticipate the project to be complete by then.
Thank you US taxpayers. we couldn’t do it without you.
HAHAHAHA!
I agree my friend. I couldn’t care less about party affiliation when it comes to this. I think those responsible should be put away for life.
I thought there were capitalists in here! They are silent on the corporate welfare. I guess you like socialism when you benefit from it.
Those who have used government and swindled the American people out of tax dollars for their benefit should be tried for treason.
This is a 15 minute video originally recorded in 1985.
This is MUST see!
Please pass this along to all your friends.
http://www.dailymotion.com/video/k6KUDv1wzraWhwlBt1
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