The Infamous Bail-out Of Fannie and Freddie

UPDATE: Government may soon back troubled mortgage giants By ALAN ZIBEL, AP
September 6, 2008

WAS. - The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies, which together hold or guarantee half of the nation's mortgage deb...

Some of the details of the intervention, which could cost taxpayers billions, were not yet available,...

The news, first reported on The Wall Street Journal's Web site, came after stock markets closed. In after-hours trading Fannie Mae's shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac's shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government's actions.

The news also followed a report Friday by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June.

That confirmed what investors saw in Fannie and Freddie's recent financial results: trouble in the mortgage market has shifted to homeowners who had solid credit but took out exotic loans with little or no proof of their income and assets.

Fannie Mae and Freddie Mac lost a combined $3.1 billion between April and June. Half of their credit losses came from these types of risky loans with ballooning monthly payments.

Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses.

Supporters, however, argue the Bush administration had little choice but to support Fannie and Freddie, which together hold or guarantee $5 trillion in mortgages — almost half the nation's total.

Concern has been growing that a government rescue of Fannie and Freddie could not only wipe out common stockholders, but also be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares.

Fannie Mae was created by the government in 1938, and was turned into a shareholder-owned company 30 years later. Freddie Mac was established in 1970 to provide competition for Fannie.

But the epic decision highlights the size of the threats facing the housing market and the economy. On Friday, Nevada regulators shut down Silver State Bank, the 11th failure this year of a federally insured bank. And earlier this year, the government orchestrated the takeover of investment bank Bear Stearns by JP Morgan Chase. news.yahoo.com/s/ap/20080906/ap_on_bi_ge/mortgage_giants_crisis
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The Republican Party have contended for some 30 odd years or so that anything appearing to slant towards socialism is EVIL. Feed a hungry child NO THAT'S SOCIALISM not with my dollar you won't. Universal Health Care NO THAT'S SOCIALIZED MEDICINE, I want no part of that. Those without insurance are lazy and have too many kids anyway, why should I care about them". The "R" Party's collective mantra is a loud MAKE GOVERNMENT SO SMALL YOU CAN DROWN IT IN A BATHTUB. But when it comes to Corporate bail-outs, which is another name for Corporate Socialism QUICK PULL THAT GOV-GUY OUT OF THE TUB AND APPLY Cardiopulmonary resuscitation (CPR)... It's enough to blow your mind! I've put together some TV clips and article excerpts to illustrate the hypocrisy of our government. A short saga of the U.S. Bail-out of two mortgage giants Freddie Mac and Fannie Mae. I guess the SHOW MUST GO ON. -- thinkingblue
PS: Next time you hear an "R" person yodel "IT'S NOT OUR DUTY TO HELP THE POOR", and "WE WON'T STAND FOR UNIVERSAL HEALTH CARE". Tell them to think about all the Big Bucks, Your Bucks, My Bucks, our government has spent bailing out the many Fat Cats and see if they will then say "Socialism is a dirty word, it's EVIL!". Yeah, right, but only if you're POOR.

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• fannie
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[mrburnone]

how can we still be talking about "irresponsible leadership"? what we have in place is outright corruption at every level. it's time to wake up people.

[casperfamfun]

Democrats and Republicans worked together on this bill. It was bipartisan, with more democrats than republicans voting for it.

The economic problems are not the result of Bush's 8 years. They are the result of 30+ years of irresponsible leadership from both parties.

[RealDooble]

Please be assured that in any of my videos, I'm NOT criticizing President Obama, I'm attempting to illustrate how the Corporate Giants of the US seen to Ignore his decress, and CHASE actually scoffed at his Making Home Affordable Program...after we bailed their asses out with our tax dollars.

I respect and stand behind our president 100%. I received the honor of an email from President Obama, verified and certified. Thank you Mr President.

[StoogeWatcher]

And you can thank the Democrats for that bailout.

[McCainThedivider]

VoteBushfriendsoutof office.They are all doing what Jefferson Davis tried along time ago!

[cheesekman]

you will c me soon!

I miss you! yp

[SonjaKaye]

Just because McCain says they are Obama's "own people" doesn't make it so...

The GOP is against regulation, and that's where the trouble started. I'm not blaming the GOP, I'm just saying they wouldn't have avoided this.

This has been a long time coming. Without proper regulation and oversight, people were bound to push it, see how far they could go. Well, we are all getting screwed over it.

[freedomthinker7]

Fannie and Freddie were looted by the Democrats. Obama's own people Johnson and Raines took millions of money that should have been for the poor. The Dems consistently blocked any CHANGE the GOP offered. How ironic, so much for Marxist redistribution. No Eichmann/Bolshevicks, NObama08.

[gwpusher]

The new world order is being imposed on you, weather or not you want it to. Governed by Rockfeller, Rothchild, CFR, Bilderberg.

Its so currupt and minipulated that "THERE IS NO LAW THAT REQUIRES YOU TO PAY TAX IN USA!"

Search google for ZEITGEIST THE MOVIE

It's unfair business, unfair stories, unfair explanations. Playing God, knowing their plans for us

. Knowing where we are going, while we dont. It isnt nessesary, we dont need a new world

order. WAKE THE **** UP and spread the word!