Posted on 09/08/2008 9:54:53 PM PDT by TigerLikesRooster
Fannie, Freddie bailout triggers credit default swaps
More than $1 trillion of derivative contracts will need to be settled
By Alistair Barr, MarketWatch
Last update: 1:30 p.m. EDT Sept. 8, 2008
SAN FRANCISCO (MarketWatch) - The U.S. government's seizure of Fannie Mae and Freddie Mac has triggered more than $1 trillion of credit default swaps tied to the mortgage giants. The International Swaps and Derivatives Association said in a memo on Monday that 13 major credit default swap dealers unanimously agreed that a credit event had occurred.
(Excerpt) Read more at marketwatch.com ...
Greetings volunbeer:
At about a 5000 fold greater theft than the Enron situation, guess we shouldn’t hold our collective breath waiting for investigations and prosecutions of the wrong doers?
This just sickens me.
OLA
Wrong. Nobody wealthy is allowed to fail.
It’s not Socialism screwing us over at this point. It’s Laissez-Faire Capitalism.
Oligarchy also greases politicians' palm from profits
If you're not part of the solution, then you must be from the government.
I have a bad feeling about this. A very bad feeling.
I've been expecting extreme nastiness most of my life. The ponzi scheme has run quite a bit longer than I thought it would, and will probably continue longer than I think it can.
One has to suspect that whomever had the losing side (a) had the money, and (b) had reason not to complain.
Perhaps the loser was us.
See MISH'S Global Economic Trend Analysis: Big Non-Event In Fannie, Freddie Credit Default Swaps for further explanations of what's going on here, and why it might blow over so quietly.
I disagree somewhat. The socialist state political class dictates who must loan to who. Also, there has been an assumption for years, if not decades that FNM would ultimately be backed up by the U.S. taxpayer. An assumption, that seems to have been a good one. This allowed people to make loans that made no economic sense whatsoever.
What economic sense does a zero-down interest-only 30 year mortgage make in a sane world?
While there was a speculative bubble, it would have run its course long ago without the guarantees and influences of Uncle Sugar on the markets. It would also be a regional problem. What was happening in real estate in California specifically was obvious insanity to most of the rest of the country.
States Running Out of Money in Jobless Funds !
Time to smell the coffee. This time it is different. Those highly paid shills for mortgage lenders got rich. Wall Street crooks got rich. They will be hiding in gated communities drinking cognac, counting their bonds and clipping coupons. Read my Tag Line: That is my message to all greedy bastards who made millions out of this financial debacle.
In the meantime, Yada, Yada, Yada
Who Lost?
Taxpayers
Small Banks holding F&F preferreds
Investors holding F&F common or preferreds
Who Won?
Thirteen "major" dealers of credit-default swaps.
PIMCO
yitbos
Not to be surprised that it is all done with the cooperation of the Feds and Congress as the bankers, brokers, financial services, credit card companies, real estate companies, mortgage origination companies (Countrywide for example), and the developers have contributed heavily to incumbents in Congress through the years.
Uh oh, when ex-Texan starts quoting bible verse you know it’s time to worry.
It’s easy to blame wall street and yes they do deserve blame, but the government as usual in my opinion is the bigger culprit.
Lehman Shares Fall After Talks With Korean Bank End !
Shares of Lehman Brothers Holdings Inc. fell about 43 % today. Rumors are depressing shareholders and infuriating rich insiders. People are scared. I smell another government take over coming . . . Oh, well. Nothing for me to do about it.
Time for Some Humor on FR: Every Breath Bernanke Takes
LOL . . . LOL . . .
Plus there’s the auto industry, the airlines, more failing banks, and talk of nationalizing oil.
How about this? A trillion is also a THOUSAND X a THOUSAND X a MILLION dollars!
So just how bad is this?
OLA - I would expect investigations and prosecutions over this but unfortunately the fools most culpable (congress) have immunity.
Wolfie - the rich usually weather these storms quite nicely because they diversify their wealth. The little guy (aka Joe Taxpayer) is the one getting bent over the barrel on this one.
“It’s easy to blame wall street and yes they do deserve blame, but the government as usual in my opinion is the bigger culprit.”
Don’t forget the company executives.
Our politicians are ENABLERS for this type of behavior.
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