Posted on 09/07/2008 9:02:41 AM PDT by CodeToad
NEW YORK (CNNMoney.com) -- Federal officials unveiled an extraordinary takeover on Sunday of troubled mortgage giants Fannie Mae and Freddie Mac, signaling the most dramatic move to date aimed at shoring up the nation's housing market.
(Excerpt) Read more at money.cnn.com ...
Your objection rings hollow, your personal integrity notwithstanding. It is fact that appraisers were pressured into making false and fraudulent appraisals during the bubble and some are even going to jail because of it. So just because you don’t personally like being lumped in with the bad guys doesn’t mean there were not a lot of bad guys giving fake, false and fraudulent appraisals.
In fact, I seem to remember the comment being “even if the appraisal is wrong today, wait a few months and house prices will go up to it...” Sound familiar?
http://www.allbusiness.com/economy-economic-indicators/economic-indicators-existing/10393248-1.html
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080906/METRO01/809060364/1409/METRO
http://www.state.nj.us/lps/ca/press/pralex.htm
http://www.signonsandiego.com/news/business/20080817-2104-mortgagemess-appraisers-abridged.html
I could go on for hundreds of pages...
If you are a Bull in the mortgage market, that would be true. I do not see any profits in the next 5 years. Too much garbage that needs to be "rescued" by our Fed. There is a long road out of the woods here.
Wachovia is screwed as far as I see. They are exposed to a blindside hit in the next few months.
Can’t help but wonder if we all would be better off if FNM and FRE took over the government rather than the other way around!
(do I need a sarcasm tag with that one????)
Every other word from that womans mouth is “tapeworm”.
Unless she can come up with a better description of what she is trying to say, I pay little heed to it.
Bank of China Ltd may own about $20 billion of debt issued by Fannie Mae and Freddie Mac, representing two-thirds of total holdings among the six largest Chinese banks, according to CLSA Ltd.
Ouch.
In the big picture, 20B ain’t exactly peanuts, but it’s not really a significant fraction of total FRE and FNM equity.
Not a whole lot of exposure there.
Hank Paulson's Fannie Gamble
http://online.wsj.com/public/article_print/SB121754567926302543.html
I can’t help being sarcastic. We had a spate of posts along those lines, “it it time to buy” about a year ago. Since then, the Sacramento area has fallen around 30%. Everybody Sacramentan who took their advice has lost their down payment and much more.
I now live in Yuba City, which is a backward little cowtown an hour north of Sacramento. We act as a suburb of Sacramento, and house prices here are down about the same as Sacramento, year over year. Last fall I found a house I just loved listed at $340,000 that sold last July for $250,500 at $120/SQFT — a drop of 26% in 8 months.
With the avalanche of foreclosures set to hit when the Option ARMs reset over the next 18 months, price pressure will be further down, and down hard. Sacramento area house prices can’t go down forever. A bottom has to come in. But a bottom has to be based on fundamentals, and those fundamentals are not saying the bottom is in.
In the meantime, lenders like Fannie and Freddie will get their heads handed to them while all those Option ARMs reset and the default rate goes through the roof.
Could you please detail step by step how this plan will decrease mortgage rates? I’m a bit lost by your assertion.
I’ll check it out.
.
You are oh So right,,,,,I just can't get used to TRILLIONS !
Republicans made key mistakes in deregulation, and we better learn what happened before we attempt it again.
By deregulating without removing the government safeties which are intended to bail out bad decisions, you get an unbridled industry that feels it can take unlimited risk at no cost.
We are as much to blame as the Dims on this one. We better learn from it this time.
Interesting that some of the troubadours here have forever held...
“Hold stocks for the long term” and
“The DJIA has outperformed all other investments”
are now changing their tune to..
“The stupid investors deserve to lose all they had...”
Agree.
Citi alone has written down $50 billion. I don’t think China would have any problem absorbing a $20 billion writedown.
Lehman has $20 B in write downs already. No, not massive exposure there for China.
Good point. How quickly things change. When the “best time to buy... EVER!” crowd comes on saying, “RE will NEVER be a good investment again,” then it is time for me to buy. LOL.
I heard the same thing from scores of people back in 1992. “We will never see real estate prices go up like that again.” Ha. Little did they know...
Agree.
Citi alone has written down $50 billion. I don’t think China would have any problem absorbing a $20 billion writedown.
Lehman has $20 B in write downs already. No, not massive exposure there for China.
If anything, they will call her in to run the 'federalized' Fanny Mac ...
Great. So much for that.
So, any bets on what the market is going to do Monday? Up or down 400 points?
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