Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

[Sapiens]

http://www.bloomberg.com/apps/news?p...WGQ&refer=home

Sept. 7 (Bloomberg) -- Treasury Secretary Henry Paulson decided to take control of Fannie Mae and Freddie Mac after a review found the beleaguered mortgage-finance companies used accounting methods that inflated their capital, according to people with knowledge of the decision.

...

Hello Comrades! AAARRRGGGG!!!! :mad:

[kingcopper]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

The beer goggles are definately wearing off!:p

[Sapiens]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

US Treasury sets news conference;GSE plan expected

http://www.reuters.com/article/rbssF...35936220080907

WASHINGTON, Sept 7 (Reuters) - U.S. Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart will hold a news conference at 11 a.m. (1500 GMT) on Sunday, the Treasury Department said.

The officials are expected to announce plans for a federal takeover of mortgage finance companies Fannie Mae (FRE.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz). FHFA regulates the two companies, the largest sources of U.S. home mortgage finance.

[jk]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

watch what they do with the preferred stock. a lot of banks are holding preferred, especially smaller banks. if they wipe out the preferred, those banks' capital bases will be impaired, and they will become ripe for either liquidation or take over. the big banks [friends of hank] might well benefit from the take overs.

[pwcmba]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

http://www.federalreserve.gov/newsevents/press/bcreg/20080907a.htm


Joint Press Release

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

For immediate release
September 7, 2008

The federal banking agencies have been assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two government-sponsored enterprises, a limited number of smaller institutions have holdings that are significant compared to their capital.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations and the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act.
All institutions are reminded that investments in preferred stock and common stock with readily determinable fair value should be reported as available-for-sale equity security holdings, and that any net unrealized losses on these securities are deducted from regulatory capital.

[metalman]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

http://www.federalreserve.gov/newsevents/press/bcreg/20080907a.htm


Joint Press Release

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

For immediate release
September 7, 2008

The federal banking agencies have been assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two government-sponsored enterprises, a limited number of smaller institutions have holdings that are significant compared to their capital.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations and the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act.
All institutions are reminded that investments in preferred stock and common stock with readily determinable fair value should be reported as available-for-sale equity security holdings, and that any net unrealized losses on these securities are deducted from regulatory capital.

so write it down now because we're gonna wipe it out.

[pwcmba]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

http://www.hithimagain.com/?p=249

8 great points to this bailout!

[Supercilious]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

http://www.bloomberg.com/apps/news?p...WGQ&refer=home



Hello Comrades! AAARRRGGGG!!!! :mad:

What's your problem??? Don't forget that all those findings were made by the Morgan Stanley "experts" (the Fed and the Treasury have a shortage of accountants).

I wouldn't be surprised to find out that tranche of mortgages worth at 60 cents for the dollar would be "valued" by the MS experts at 40 cents for a dollar. Bear Stearns-JP Morgan-Black Rock ... sounds familiar ?

http://www.bloomberg.com/apps/news?p...vEw&refer=news

Pacific Investment Management Co. and other large investors may put in their own money once the Treasury decides to inject government funds, Bill Gross, manager of the world's biggest bond fund at Newport Beach, California-based company, said Sept. 5 in a Bloomberg Television interview.
About 61 percent of Gross's holdings were mortgage-backed securities as of June 30, mostly debt guaranteed by Fannie, Freddie or government agency Ginnie Mae, according to data on Pimco's Web site.

Did the fed use taxpayer's money to save Average Joe (who was conned into buying and obscene mortgage) or to increase the profits of Wall Street Pimpco entities who were the responsible for screwing Average Joe?

Here is a longer version:

http://www.theoildrum.com/node/4503

[sunskyfan]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

Pink Floyd's "Comfortably Numb" keeps comming to mind. It looks like an economic reboot is comming to me and this is usually done with a war proportional to the problem. Ick. The capital markets are now absurd. Who will tell the people?

[Mega]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

Pink Floyd's "Comfortably Numb"

Yes, they did this to keep us in line while they bombed Iraq etc.............but the gamble failed.............Busted flush!

Now all this SHIT will come & people ARE going to get "Upset"............I wonder how those FEMA Camps are coming along?
Mike

[jk]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

http://www.federalreserve.gov/newsevents/press/bcreg/20080907a.htm


Joint Press Release

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision

For immediate release
September 7, 2008

The federal banking agencies have been assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two government-sponsored enterprises, a limited number of smaller institutions have holdings that are significant compared to their capital.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations and the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act.
All institutions are reminded that investments in preferred stock and common stock with readily determinable fair value should be reported as available-for-sale equity security holdings, and that any net unrealized losses on these securities are deducted from regulatory capital.

[emphasis added]

what a relief! the problem is CONTAINED.:rolleyes:

[btw, "a limited number" means any number less than infinity.]



Banks with significant holdings of GSE preferred shares include Sovereign Bancorp (SOV) and M&T Bank (MTB). Integra Bank Corp. recently announced that it had liquidated all its holdings in the securities.
Concern about banks' exposure to the GSEs first surfaced in 2004, in the wake of an accounting scandal at Freddie Mac.
The FDIC issued a report at the time saying that the commercial bank and thrift holdings' of securities issued or guaranteed by the GSEs topped 11% of the firms' total assets and exceeded 150% of their Tier 1 capital.
The report also said about 3% of FDIC-insured institutions had "very high" concentrations of "GSE-related securities" that amounted to more than 500% of their Tier 1 capital.

http://64.233.169.104/search?q=cache...lnk&cd=1&gl=us
this is a cached article. for some unknown reason the original article, only a week old [8/28/08], has been removed from the cnnmoney.com website. hmmm.

[Sapiens]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

Who will tell the people?

Why tell them?

Have you pointed out the obvious, just to be rebuffed?

Those that want to know eventually will get to the truth.

It truly is a thankless job to inform the unwashed that Life requires responsibility.

I would recommend being more interested in securing your own share and competing with the big dogs. It is not hard to do once you know how to play the game.

[Sapiens]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

[emphasis added]

what a relief! the problem is CONTAINED.:rolleyes:

Close call! :rolleyes:

Good thing we have competent people in govt. huh? :rolleyes:

[D-Mack]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

Pink Floyd's "Comfortably Numb" keeps comming to mind. It looks like an economic reboot is comming to me and this is usually done with a war proportional to the problem. Ick. The capital markets are now absurd. Who will tell the people?

If the Russians (Foreign Minister) think it's the 20's again, I don't want to know how the war will look like.

The rigid Anglo-Saxon model of socio-economic development has again started to fail, as it did in the 1920s. This time, the failure is due to the isolation of the U.S. financial system from the real sector of economy.

http://eng.globalaffairs.ru/numbers/24/1210.html

U.S. is on brink of survival crisis, according to Moscow

MOSCOW. July 29 (Interfax) - Moscow thinks that the United States could face a serious domestic crisis in the near future.

"The U.S. is on the brink of a mass crisis of surviving," a source with the Russian Foreign Ministry told journalists on Tuesday.

"The U.S. is on the track of drastic and painful changes," he said. "At first, they have to learn to live within their means," the diplomat added. Speaking about relations between Moscow and Washington, the source said that less interdependency in Russian-U.S. relations would be useful.

"We can in the future reach the moment when we will be able to stop discussing only the issues the U.S. side is interested in," he said.

"We are not enemies with the U.S., and unfortunately we are still not friends, but we are depending on each other less and less," the diplomat said
http://www.globalresearch.ca/index.p...xt=va&aid=9704

[GRG55]

Re: Fannie, Freddie Capital Concerns Prompt Paulson to Take Control

If the Russians (Foreign Minister) think it's the 20's again, I don't want to know how the war will look like.

U.S. is on brink of survival crisis, according to Moscow

MOSCOW. July 29 (Interfax) - Moscow thinks that the United States could face a serious domestic crisis in the near future.

They just figured this out?


Reminds me of Khrushchev...

"We Will Bury You!"
From Time Magazine; Monday, Nov. 26, 1956

...Nikita plunged on, turning to the Western diplomats. "About the capitalist states, it doesn't depend on you whether or not we exist. If you don't like us. don't accept our invitations, and don't invite us to come to see you. Whether you like it or not. history is on our side. We will bury you!"

Just the day before, ambassadors of twelve NATO nations had walked out on a Khrushchev tirade that lumped Britain, France and Israel as bandits. Now Khrushchev was off again.

The Kremlin men cheered. Gomulka laughed. Red-faced and gesticulating, Nikita rolled on: "The situation is favorable to us. If God existed, we would thank him for this. On Hungary—we had Hungary thrust upon us. We are very sorry that such a situation exists there, but the most important thing is that the counterrevolution must be shattered...

History rhyming once again???