Pam "SFSOM" in TN Posted September 6, 2008 Share Posted September 6, 2008 From the NYT today: "Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said." :001_huh: Oh my. Quote Link to comment Share on other sites More sharing options...
Jami Posted September 6, 2008 Share Posted September 6, 2008 "With what shall they buy it, dear Pammy, dear Pammy? With what shall they buy it, dear Pammy with what?" (I can call you Pammy for the sake of the rhythm, right? :blush:) Quote Link to comment Share on other sites More sharing options...
nakitty Posted September 6, 2008 Share Posted September 6, 2008 :lol: Quote Link to comment Share on other sites More sharing options...
Parrothead Posted September 6, 2008 Share Posted September 6, 2008 "With what shall they buy it, dear Pammy, dear Pammy? With what shall they buy it, dear Pammy with what?" (I can call you Pammy for the sake of the rhythm, right? :blush:) More of our tax dollars is what they will buy it with. If the gov't would just let this thing run its course.. I know, I know it's a pipe dream. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted September 6, 2008 Share Posted September 6, 2008 From the NYT today: "Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said." :001_huh: Oh my. If the US is in a mental recession (as has been suggested by a former senator) then perhaps there will be a mental bail out. Jane Quote Link to comment Share on other sites More sharing options...
Pam "SFSOM" in TN Posted September 6, 2008 Author Share Posted September 6, 2008 "With what shall they buy it, dear Pammy, dear Pammy? With what shall they buy it, dear Pammy with what?" (I can call you Pammy for the sake of the rhythm, right? :blush:) You may, just this once. But I'd prefer if you'd do "Pammers" if you must do rhythm in the future. :D Quote Link to comment Share on other sites More sharing options...
Pam "SFSOM" in TN Posted September 6, 2008 Author Share Posted September 6, 2008 "With what shall they buy it, dear Pammy, dear Pammy? With what shall they buy it, dear Pammy with what?" (I can call you Pammy for the sake of the rhythm, right? :blush:) The Chinese are waiting, dear Jami, dear Jami, The Chinese are waiting to help. Quote Link to comment Share on other sites More sharing options...
Mom to Aly Posted September 6, 2008 Share Posted September 6, 2008 If the US is in a mental recession (as has been suggested by a former senator) then perhaps there will be a mental bail out. Jane I think that started nearly 8 years ago--isn't that what we are hoping this next election will bring an end to? :D Quote Link to comment Share on other sites More sharing options...
Jami Posted September 6, 2008 Share Posted September 6, 2008 The Chinese are waiting, dear Jami, dear Jami,The Chinese are waiting to help. :lol: :001_huh: Quote Link to comment Share on other sites More sharing options...
Mrs Mungo Posted September 6, 2008 Share Posted September 6, 2008 I strongly suggest googling Senator Phil Gramm and lending deregulation. Phil Gramm is now one of Senator McCain's top advisors. I'm not going to get into it here but I think it's something people should educate themselves on. Quote Link to comment Share on other sites More sharing options...
Mama Lynx Posted September 6, 2008 Share Posted September 6, 2008 From the NYT today: "Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said." :001_huh: Oh my. Tell me you're not surprised. Quote Link to comment Share on other sites More sharing options...
sdWTMer Posted September 6, 2008 Share Posted September 6, 2008 is :banghead: Quote Link to comment Share on other sites More sharing options...
hsmamainva Posted September 6, 2008 Share Posted September 6, 2008 There are sooo many to blame for this mess! There was an article in the Washington Post about this awhile back. Some mortgage broker gave a $500,000 mortgage to someone who made $35,000 a year working at McDonalds. :glare: Here's a link to the article: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/14/AR2008061401479_pf.html Quote Link to comment Share on other sites More sharing options...
Phred Posted September 6, 2008 Share Posted September 6, 2008 The Chinese are waiting, dear Jami, dear Jami,The Chinese are waiting to help. So we buy the crap that they make Dear Pam-o Dear Pam-o Dear Pam-o Ten plastic cows and a snake At Walmart we buy it The kids had to try it Now there's lead in their diet But Beijing can buy bonds with the take. Quote Link to comment Share on other sites More sharing options...
tibbyl Posted September 6, 2008 Share Posted September 6, 2008 I strongly suggest googling Senator Phil Gramm and lending deregulation. Phil Gramm is now one of Senator McCain's top advisors. I'm not going to get into it here but I think it's something people should educate themselves on. In addition to googling the above suggestion, I would add that one google to learn about John McCain's role in the Keating savings and loan failures in the 80s and 90s. Numerous senators from both major parties were involved in influence peddling. tibbyl I don’t believe in capital punishment for humans, but I believe in it for corporations. The whole tort reform trip is to try to keep it so corporations cannot be sued out of business, and I thought a corporation that did bad stuff should be sued out of business. I thought the way capitalism works was, if you’re out in the jungle and a lion bites off your leg, then you’re a one-legged capitalist and that’s just the dam way it goes. - Stephen Gaskin, founder of The Farm Quote Link to comment Share on other sites More sharing options...
chiguirre Posted September 7, 2008 Share Posted September 7, 2008 I'm a Democrat, but IMHO, the Bush administration has no other option except backing up Fannie Mae and Freddie Mac. They've operated under an implied government guarantee for too long to let them fail without undermining the "full faith and credit" of the US Treasury. Here's a wiki reference to get you started on investigating Fannie, Freddie and the implied guarantee: http://en.wikipedia.org/wiki/Fannie_Mae Scroll down to Guarantees and Subsidies. Of course, we taxpayers should feel free to assign the blame for this massive bailout to those who allowed the subprime market to run rampant this decade. Quote Link to comment Share on other sites More sharing options...
6packofun Posted September 7, 2008 Share Posted September 7, 2008 From the NYT today: "Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said." :001_huh: Oh my. Can someone explain to me (in simple terms! LOL) the differences in this "strategy" (used loosely) and the one being pushed before to bail out all those people who chose adjustable mortgages way out of their means and are losing their homes? Or was this the same plan? LOL Sorry, economics is not my thing and I'm curious what the implications of these routes might be? Thanks if you can take the time to explain a bit! Quote Link to comment Share on other sites More sharing options...
Mom2legomaniacs Posted September 7, 2008 Share Posted September 7, 2008 Interesting and odd tidbit side related: My cousin recently got married. Her mom (my aunt) has a bff with 2 daughters, one of whom I grew up playing with. She is now a lawyer in DC. She went to my cousin's wedding with a "date". This date was Franklin Raines, one of those indicted in the Fannie Mae hoopla a couple of years ago. It is an odd thing in that they seem to be, on the outside by age and appearances, an odd combination. And, my mom's friend that went with her knew of him. He asked Franklin Raines about things much to the amusement of my friend! :lol: Quote Link to comment Share on other sites More sharing options...
anissarobert Posted September 7, 2008 Share Posted September 7, 2008 I'm trying to ignore all depressing economic news this week, and you guys won't let me!:001_smile:Oh well if I have to think about it at least I'm entertained. I love the the poetry. l:lol: Quote Link to comment Share on other sites More sharing options...
Mom to Aly Posted September 7, 2008 Share Posted September 7, 2008 I don't get it--they say they are doing it for the economic good of the "people"; they cannot let these companies fail, because of what it would do to the American public. But this is going to cost the AMERICAN PEOPLE $25 billion!!! Actually more, because that is the minimum bailout amount, but by the time it goes through government paperwork, committees, etc, it will have to cost a ton more, because that is the gov't. But all this is to help keep us going into a recession, which Bush says we are not in, because, really, the economy is not that bad, no, it isn't, and there is no such thing as global warming, and the polar ice caps aren't melting, and the polar bears will be around for ever, and I think I will fly through the sky on my gossamer wings and drop some of my dog's poop on his head tomorrow, just for fun!! :( Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted September 7, 2008 Share Posted September 7, 2008 Can someone explain to me (in simple terms! LOL) the differences in this "strategy" (used loosely) and the one being pushed before to bail out all those people who chose adjustable mortgages way out of their means and are losing their homes? Or was this the same plan? LOL Sorry, economics is not my thing and I'm curious what the implications of these routes might be? Thanks if you can take the time to explain a bit! Two different issues within a thorny mess. Back in the depression, FDR created Fannie Mae so that banks would have more enough money available for mortgages. As I understand it, when a bank (or other mortgage lender) sells you your mortgage, it is rare for that bank (or other lender) to shelve it, that is, keep it. There is a secondary market of mortgage buyers that will purchase the mortgage from your lender, freeing up money so that your bank can loan to your neighbor. Fannie Mae and Freddie Mac buy or guarantee secondary mortgages. Lyndon Johnson converted Fannie Mae and Freddie Mac to a public/private company--shares are sold, but there are ties to the feds. Now without shoring up these quasi-public/private institutions (Fannie Mae and Freddie Mac), there is the possibility that more banks could fail or that the cost of a mortgage could become too high for many Americans--all nightmarish thoughts for our economy's future. What connects the two issues you mention is that banks and lenders were not operating prudently. This is not the first time that the feds have stepped in to help a failing company. Think Chrysler. Or think about the Savings and Loan issue from the '80's. As they say, what goes around comes around. Because McCain was a member of the Keating Five, his past may come to haunt him on this parallel issue. Wikipedia is probably a fine place to start. You can read about Fannie and Freddie there. The New York Times, Washington Post and Wall Street Journal have online editions that will keep you posted on the lastest and provide background information. Hope this helps you. Jane Quote Link to comment Share on other sites More sharing options...
Soph the vet Posted September 7, 2008 Share Posted September 7, 2008 Now without shoring up these quasi-public/private institutions (Fannie Mae and Freddie Mac), there is the possibility that more banks could fail or that the cost of a mortgage could become too high for many Americans--all nightmarish thoughts for our economy's future. Thanks for some explanation, Jane. Maybe I am looking at this oversimplistically (sp?) but the cost of a mortgage should be too high for some Americans. I rented until I was 30, so did my dh. When I met him at 28, he was living in a studio apartment, although he could've afforded a much larger one. I was living in a friend's house in one bedroom, even though I could've afforded to have my own place. The sense of entitlement that young adults have or the sense of keeping up with the Joneses is fueling this. It should be hard to buy a house. You should have to put 10-20% down on it. Instead people get out of school, get their first real job and expect a brand new car and a home right away. We did not have a new car until we both turned 40. When we applied for our first mortgage, of course they approved us for much more than we knew we could afford, but we didn't take it! Why are people taking out mortgages that they cannot afford?? I know there are cases where there is a job loss, a disability or a death and the financial situation changes dramatically for the family. But I do not think that was the case in the overwhelming majority of these cases. Quote Link to comment Share on other sites More sharing options...
dragons in the flower bed Posted September 7, 2008 Share Posted September 7, 2008 Oh, I know this song! But how shall we pay them dear Jami dear Jami? But how shall we pay them dear Jami from where? From our paychecks dear Pammers dear Pammers dear Pammers From our paycheck dear Pammers, they'll take it right out Then what of homeownership dear Jami dear Jami? Then what of home ownership, where's the money for that? Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted September 7, 2008 Share Posted September 7, 2008 When we applied for our first mortgage, of course they approved us for much more than we knew we could afford, but we didn't take it! Why are people taking out mortgages that they cannot afford?? I know there are cases where there is a job loss, a disability or a death and the financial situation changes dramatically for the family. But I do not think that was the case in the overwhelming majority of these cases. While I agree that money was just too easy to come by in the last few years for jumbo loans and potentially risky borrowers (102% mortgages!! No credit check!!), this doesn't quite remove the need for secondary mortgage buyers like Freddie and Fannie from the picture. Even when 20% down was the standard a few decades ago, Freddie and Fannie were buying mortgages from your local bank to provide them with liquidity. Nor do I feel that it is right to exempt the management of these companies and other security firms/banks (and their lobbyists) from responsibility. They knew what they were doing! Those of you who feel laissez-faire is the answer: how do you deal with the potentially bottoming of our markets if Freddie and Fannie are not bolstered? Perhaps we can all agree on how we got here, but now we need to ask how do we get out of this situation? Jane Quote Link to comment Share on other sites More sharing options...
melissel Posted September 7, 2008 Share Posted September 7, 2008 When we applied for our first mortgage, of course they approved us for much more than we knew we could afford, but we didn't take it! Why are people taking out mortgages that they cannot afford?? I know there are cases where there is a job loss, a disability or a death and the financial situation changes dramatically for the family. But I do not think that was the case in the overwhelming majority of these cases. Because many, many people are not as smart or as thoughtful or as experienced as you are. They believe their "experts" when the experts tell buyers it's a manageable deal. We bought our current home using a mortgage middleman (what the heck are they called? I can't remember!)--supposedly a "friend" who did the mortgage on our first apartment--who tried very hard to convince to take a fancy mortgage (pay just interest for the first five years! pay just interest unless you feel like paying more that month--think of the flexibility it gives you! Get an ARM--you'll probably move in five years anyway!). DH really wanted to go for one of those, and he was a real estate agent! But the economy was fabulous, everyone had lots of money, he thought we had the self-discipline to do it, AND he trusted this "friend." I refused and insisted on a standard mortgage, so we now we have a 30-year fixed at 5%. Plus, real estate agents did quite a bit of hyping themselves. I know my DH hyped a few 102% mortgages. People don't buy houses unless they think they can manage it, and anyone in a business related to the housing market wants to convince them they can manage it. It's all sales, all of it. There are so many groups of people who are culpable for this mess, it's stunning. Again, the economy looked great--who knew this was going to happen? It's all a house of cards, so people just keep crossing their fingers that it won't get blown down instead of truly living within their means, and they trust "experts" to tell them what they can and can't do, when the experts are really just salespeople. (And I can say this because I'm one of the blackest of pots myself, trust me!) Quote Link to comment Share on other sites More sharing options...
kristavws Posted September 7, 2008 Share Posted September 7, 2008 From the NYT today: "Senior officials from the Bush administration and the Federal Reserve on Friday informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said." :001_huh: Oh my. Actually, YOU and I will be bailing them out. Krista Quote Link to comment Share on other sites More sharing options...
Amy loves Bud Posted September 7, 2008 Share Posted September 7, 2008 Actually, YOU and I will be bailing them out. Krista Yep. And our children. And their children. Frankly I'd rather not bail them out and deal with the fallout now and not pass MORE debt to my children. Quote Link to comment Share on other sites More sharing options...
beansprouts Posted September 7, 2008 Share Posted September 7, 2008 While I agree that money was just too easy to come by in the last few years for jumbo loans and potentially risky borrowers (102% mortgages!! No credit check!!), this doesn't quite remove the need for secondary mortgage buyers like Freddie and Fannie from the picture. Even when 20% down was the standard a few decades ago, Freddie and Fannie were buying mortgages from your local bank to provide them with liquidity. ...and now the US government OWNS all these loans. I have read these two companies are guaranteeing as much as 50% of the mortgages in America. Does this mean the government essentially owns all these homes? Is this a step towards socialist housing? Those of you who feel laissez-faire is the answer: how do you deal with the potentially bottoming of our markets if Freddie and Fannie are not bolstered? Perhaps we can all agree on how we got here, but now we need to ask how do we get out of this situation? Laiseez-faire would have been the answer but the government could not keep their hands out of the mortgage business. They passed legislation which essentially forced banks to write bad loans so as not to "discriminate". Thus the mess we now have... Quote Link to comment Share on other sites More sharing options...
Jami Posted September 7, 2008 Share Posted September 7, 2008 I was listening to NPR this afternoon and they were discussing the bail-out and connections to China. Here's an overview with several links, I found the discussion interesting and a little disconcerting. The commentator pointed out that the solution economically would be for Americans to pay more taxes, have lower standard of living, and the gov't cut spending on programs. Nothing ANY politician is going to champion! Part of lowering the standard of living was connected to stopping purchasing cheaper goods Made in China. I guess the huge amount of money that China makes on selling goods to Americans needs to be invested somehow, so they buy up bonds from Fannie Mae/Freddie Mac, then for the sake of both economies, the US Gov't has to back these bonds. At least that was how I understood the situation as described by the guy on NPR. http://www.npr.org/blogs/globalpoolofmoney/2008/09/the_fannie_and_freddie_bailout_1.html Jami Quote Link to comment Share on other sites More sharing options...
Guest Virginia Dawn Posted September 7, 2008 Share Posted September 7, 2008 :001_huh: Oh my. My sentiments exactly. Quote Link to comment Share on other sites More sharing options...
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