I know we fight and bicker in here...

but the federal bailout of Fannie and Freddie is the beginning of the end for the US as a nation

privatizing profit and socializing risk

fannie and freddie have about 5.3 trillion in debt that is currently not on the USA's balance sheet (even though its implicitly guaranteed by the feds) and deficit of 9 trillion.......our GDP is roughly 14 trillion

what happens when we suddenly owe more than we're worth? or our debt is greater than our GDP?

-AAA credit rating becomes very questionable
-those mortgage rates at 6% will jump 3-4 points
-if you want to loan the us government money through the purchase of bonds you can probably get more than 4.3% (if you can find bonds to buy) on the 30 year which means...we can no longer just auction off $50b worth of notes on a wednesday b/c we need cash. the interest payments will be too great for the country to bear

i dont know if it's ever happened to a G8 country but this can trace back to when nixon took us off the gold standard because our debt was more than the amount of gold we had in reserves



read Panzner, read Nouriel Roubini, read Ron Paul

they know whats coming...cash is king. have a great sunday and dont let those talking heads on tv tell you this is a good thing. this is as awful as can possibly be. (aaaa1 and macman know what i'm talking about)

fannie and freddie are government sponsored sub prime lenders and should have never been authorized at all. they need to be dissolved and their assets auctioned off to the private sector. they cannot be politicized...for the long term economic health of the country, they mus be dissolved ASAP

You know the answer to that one yourself. It is easy.. cut spending and decrease the defecit.

That means a stop to all taxcuts!! That wont happend, however Obamas taxplan creates more taxrevenue than McCains do.

Do the math yourself..

https://www.nytimes.com/2008/07/08/us/politics/08econ.html?_r=1&adxnnl=1&adxnnlx=1220786545-vwEoEU6lITC6Q1TsWxlOJg&oref=slogin

mikael ...you CANNOT assume that productivity will stay the same when you punish success. just like in denmark, when you have a top tax rate of 63%, those who have earning potential will leave the country. check my brain drain articles from the other day on denmark

tax hikes never raise revenues ever. they never have in this country

the answer is to cut spending for FY09 and cut it from everywhere...25% off the top....salaries, benefits, everything and pay down the debt

KOAJ

Maybe so but even with increased economic growth from the taxcuts, it would still lead to an increased deficit.

The wise thing to do would be to cut spending and cut down the taxcuts.

The answer to this particular problem has nothing to do with tax cuts, especially when the unemployment rate is rising. Cutting spending is the answer, in particular non-essential spending, suspending things like the "Vision for Space Exploration, and pulling out of Iraq


I see one candidate supports the takeover, and the other has no position.

palin's quote:

At a rally in Colorado Springs, Col., Republican vice presidential nominee Sarah Palin said, "They've gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."

she understands that they are a huge drain on the US

Obama's quote:

"These entities are so big and they're so tied into the housing market that it is probably true that we have to take steps to make sure they don't just collapse, because the housing market, which is already weakened, would be in even worse shape if we didn't take some steps."
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mikael - do you see the difference here. i think Palin gets it. Obama does not. we just wrote fnm/fre a blank check up to $300b...for their entire existence, their line of credit with the US government was $2b. they need more? how much barack? where are you getting the money?

mccain has no quote on it yet but we know he is not an economic savant however given that the overriding theme to his government is smaller and smarter government; he should focus on getting rid of the fat

hoping iraq will be over soon or at least a lot of our boys out of there

mikael - raising taxes does not widen the tax base. mandating a higher cost for business will force them to cut costs or leave the US...your choice b/c they arent going to absorb the hit

 

wow, can't believe i agree w/ apache on something 

Start getting out yes, but, not a full withdrawel until the Iraq govt is ready to take over from day number 1

they need more? how much barack? where are you getting the money?

never and no one asks

oreilly will tomorrow though

She said she would do it up here when she was elected as Governor and she did... She is alot smarter than people are giving her credit for.

AK - better to be underestimated and outperform than to be annointed the Messiah before ever doing anything and be throughly disappointed

Read it again, KOAJ.

"They've gotten too big and too expensive to the taxpayers"

I thought they were PRIVATE companies.

Palin.

lol private...an implicit government guarantee is as good as explicit which is what we got this morning as a certainty

this was PIMCO's bailout....google bill gross and fannie. he owns a shitload of fannie/freddie debt knowing the govt would make good on it and eliminate shareholder equity in the process

if you never believed taxpayers funded these GSE's then now you know for sure...we're now on the hook for 200b at a minimum to bailout two institutions that should have never been created in the first place.

fannie, freddie, social security, medicare, medicaid

we have no more money.

they euphoria from yesterday has worn off and now back to reality

LEH and WM are being run...maybe casualties of the bailouts

been rumored since march

Merrill is next

ap1 - not all are being bailed out...WM wont be, neither will LEH or MER

BSC they did b/c they thought it would stop the contagion...it didnt

fnm/fre they did b/c the chinese and PIMCO owns a ton of the debt

theres much more to come...and its all crooked and fucked. sit cash and hope they government doesnt destroy the dollar

I'll be damn, whos running the frigging governmen now.