Shocker: U.S. Nears Rescue Plan For Fannie And Freddie

SpreadtheJAM

Driftin is like the crazy guy on the streets of manhattan making all these prophecy's proclaiming the end is near and when you do it long enough one might just be fulfilled.

Kann

OutOfBreath wrote:

Actually, there is precedent for this. It happened in Norway in the early 90s. We had a period of liberalized banking that quickly led to overlending and a banking crisis when the general economy took a plunge...

Many countries already witnessed this and it always starts by a "period of liberalized banking". I still fail to understand how people continue to advocate 0 regulations, when there are so many examples too show that too many or too little regulations generally lead to massive failure.

SpreadtheJAM wrote:

Driftin is like the crazy guy on the streets of manhattan making all these prophecy's proclaiming the end is near and when you do it long enough one might just be fulfilled.

He's not crazy, he's passionate about his ideas
But whatever he says he's more right than you care to aknowledge when he says the end is nigh. Not the end of the world, or of the USA of course, but the end of the current $-based worldwide economy. Things change, and the current twitching we're witnessing is a sign of that, things will change and the reference currency is bound to change soon.

OutOfBreath

Kann wrote:

Many countries already witnessed this and it always starts by a "period of liberalized banking". I still fail to understand how people continue to advocate 0 regulations, when there are so many examples too show that too many or too little regulations generally lead to massive failure.

Indeed. In Norway's case it was the transition from very regulated banking to no regulation in the 80s that provided the crisis. We then re-regulated somewhat, and seems to have found a balance. Some regulation seems to be crucial to any financial market if you want to avoid regular crashes.

Peace
Dan

Pacomc79

OutOfBreath wrote:

Indeed. In Norway's case it was the transition from very regulated banking to no regulation in the 80s that provided the crisis. We then re-regulated somewhat, and seems to have found a balance. Some regulation seems to be crucial to any financial market if you want to avoid regular crashes.

Peace
Dan

We've had some issues like that in the US in other areas as well concerning energy deregulation and telecom ownership deregulation.

g under p

AMY GOODMAN: What do you think of the bailout?


MAX FRAAD WOLFF: Well, I think that it’s a little bit like the Bear Stearns “bailout,” quote-unquote, which is, it’s a little bit more funky and a little bit more complicated than it probably needs to be and than it’s generally represented in the media. So what the government has done is take control and assume all the risk associated with these two gigantic financial companies without fully taking them over, in a classic sense, and without fully offering as much protection as they’re telling the world they offer.


And I do think it’s a watershed moment in the history of American homeownership, and it’s a watershed moment in the relationship between financial firms and the government—another. They’ve been coming fast and furiously in the last thirteen months, as the credit crisis intensifies and drags out. But it’s a big change in the way American homes will be financed down the road, and it’s a big change in who’s to blame and who has to ultimately pay back for the mistakes of the housing bubble.


AMY GOODMAN: Max, step back. How did these institutions get established, and why?


MAX FRAAD WOLFF: OK, well, they were established for reasons that will be immediately interesting to your audience, I’m sure. In 1938, Fannie Mae, the older, larger, was born, and it was born to do two things, which I think we can relate to now: reduce the number of foreclosures and increase the amount of homeownership by middle-class Americans. Before Fannie Mae, a relatively smaller percentage of more affluent Americans owned their homes. So, in 1938, only about 40 percent, a little over 40 percent, of Americans owned their own home, whereas last year 68 percent of Americans owned their own home. So it did work, on some level.


Freddie Mac started in 1970 to give competition to Fannie Mae. And Fannie Mae was taken out of the government and privatized in 1968. So, in 1938, Fannie Mae is born; in 1968, it’s privatized; in 1970, Freddie Mac is introduced to compete. Their basic function has been, with—the way it’s done has changed a bit—but to act as an intermediary between banks loaning to households and financial markets to make more loans available at lower prices to more Americans.

The US government has seized control of the mortgage finance companies Fannie
Mae and Freddie Mac in what could become the largest corporate bailout ever. The
Treasury Department has pledged to provide as much as $200 billion as the two
quasi-public companies deal with heavy losses on mortgage defaults. We speak
with economist and writer, Max Fraad Wolff.

Listen/Watch/Read
http://www.democracynow.org/2008/9/9/us_bails_out_fannie_mae_freddie

Peace

Cosmo

jeffbr wrote:

LOL. I was going to bet OLS $100,000 but he wanted to have me put it in escrow. I didn't really want to liquidate assets to tied up $100,000 in escrow for a bunch of years, and he didn't think we could do the bet with just a written piece of paper, so it never happened. Probably just as well since it appaears OLS was a fraud anyway.

...
Oh... okay... you were the one. I thought it might have been Catch22.
I remember it being a pretty decent chunk... 20K or 100K or 200K. An amount pretty ridiculous for a really ridiculous bet.
I tried to go in for 100 bucks... but he wouldn't take it because it was too cheap.
...
and yeah... eventually, my home will be under the Pacific Ocean. But, only after Orange County slide past San Francisco as the Pacific Plate spins past the North American Plate in the next million or so years...
Hopefully, I'll have moved out of that place by then.