The government is now announcing that they (we) are taking over Freddie and Fannie. So, you and I are now the proud socialist owners of a couple of huge failed businesses. Personally, if I was going to spend my money on something, I would have rather bought a successful business! I guess I’m a socialist after all! I just became part goverment owner in a socialized business!
Mike
A part owner with no say. And this isnt the first time either. But the people that put us in this position are our neighbors.
I know you’d never hear this out of either candidate’s mouth because they’d lose a ton of votes in a heartbeat, but it just INFURIATES me that we are being forced to bail out tons of people who were too stupid to understand their own finances enough to buy a house they could actually afford (both now and in a few years when their teaser interest rate changes). People need to be responsible for their own actions.
It’s what the voters want; socialize the loses, privatize the gains.
Unbelievable…
Can you really go wrong buying Stock in Fannie and Freddie now? You know it will never crash because the government owns it now correct?
Hold on to your wallets, because you will probably be bailing out General Motors next. I wonder if I needed help if the government would bail me out? Oops, I forgot that I’m not “too big to fail”. What a load of crap!
Mike
There is ONE candidate that agrees with you totally. Bob Barr.
Here is his announcement concerning Freddie and Fannie
http://www.bobbarr2008.com/press-releases/123/barr-blasts-latest-government-bailout/
Our government is so corrupt and dysfunctional that is cannot right itself. A 2 party system does not work “for the people”. Who is it helping by bailing out failed businesses that are publicly owned? Does it seem right that a company that fails to do business fairly should be saved when it is going under?
The ONLY people who needed to be bailed out were the ones where the lender committed outright fraud in signing them up for loans. Those loans should be re-written. The expense of that should be on the lenders who did it, if they are still solvent.
I am as burned as all you are if we have to bail out investors who thought appreciation would go on forever. Let their ships go down in flames!
Yes, it sucks that the government has to bail out Fannie and Freddie. Why aren’t there hearings, firings, and accountability for that kind of leadership failure?
Furnishedowner
It’s just a shame he has zero chance of winning. Someone like him has no prayer of making a successful run at it unless he can get the media behind him. Unfortunately the media has been and will continue to misconstrue things to steer the elections in the way they want them to go. Their “unbiased” views are only reflective of the owners of these media giants (i.e. the Communist News Network).
I fully support and defend people voting for their choice of candidate. My personal view is that in a race like we have (where we know no candidate besides Sen. Obama or Sen. McCain will have a decent chance of winning), a vote for a third party may as well just be a vote in favor of the major party you DON’T want to win. I may not agree with everything either of the major candidates have to say, but I’ll still vote in favor of the better of the two until we see an outsider in the future who can make a successful run at the Presidency.
I still think it’s pathetic how people will trash each other early on and then all seem to support and talk up the nominee when the nomination has been clinched (see those quotes of Sen. Biden saying Sen. Obama isn’t prepared to be President, but now Sen. Biden is saying Sen. Obama IS ready).
I’m not just ticked about the “investors,” but also the homeowners who thought they were going to ride the never-ending appreciation train. The fact is that if you don’t understand what you are signing for, you should not sign for it. The loan documents had to have these terms regarding interest rate re-adjustment written in there somewhere. The government should not shield people’s stupidity. It was blatant greed that caused these problems. People wanted to be able to keep up with the people down the street. If you make $50K/yr and are told you qualify for a $1MM house, there should be all kinds of red flags going up when the lender shows you what your monthly payment will be. The responsibility stops with the people signing to purchase the homes. No one held a gun to their head and made them do it. Face the foreclosure and learn the lesson.
Lots of opinions here. The facts, however are that bailouts are the golden parachutes of wall street greed mongers.
Who here remembers the S&L crisis of the 80’s and the bailout by Big Govt with the Resolution Trust Corporation (RTC)?
This is history repeating itself. However, this time it’s hitting homeowners close to home (no pun intended) because the fraud was allowed to take place in the residential mortgage markets like never before.
Don’t think guys like James Cayne (Bearns Stearns), Angelo Mozillo (Countrywide) and the rest aren’t fully aware that history is on their side if they decide to shipwreck their companies and destroy the fortunes of their investors. They know that once you’re big enough, Uncle Sam has no choice but to bail you out, lest the droves of bought-off politicians have their back-room deals exposed and risk losing their coveted positions of power.
This is nothing new folks. The only question for me is when will Americans stop putting up with blatant fraud, mismanagement and the complete failure of the Feds to stop rampant greed by turning a blind eye to these types of situations. When will Americans stop putting well-dressed, well-spoken empty suits in congress and start considering the character, credentials, ethics and morality of the people they elect.
It’s amazing either how much we Americans are tolerant of, or how blindly ignorant we are to what’s happening in Washington and in our own state legislatures. Don’t we as a country realize that politicians will take care of their own at the expense of us taxpayers?
The Saving & Loan debacle cost an estimated $29 BILLION (that’s about $55 billion in today’s dollars). This fiasco, if the numbers are not understated as they usually are, will cost nearly $400 BILLION DOLLARS!!! Let’s pile that onto the mounting war debt and other unfunded obligations both domestic and abroad (especially Social Security) and we are just going to have to devalue our currency into oblivion, since the government seems to have an endless supply of bailout money.
I know it’s oversimplified, but if we had to cash in our chips and pay off our debt, the average family of four would have write a check for over $127,000 to cover the existing debt, without even considering future obligations, which could easily triple quadruple that number. Thank goodness we don’t have such a financial day of reckoning to deal with–at least not yet.
Sure we can place the blame on everyone from the banks and wall street to the ignoramuses who borrowed money they couldn’t repay to the loan sharks that made the loans in the first place. But why, oh why, must we bail out these so-called victims time after time?
Geez!
I think that most Americans actually approve of this bailout because, in my opinion, the psyche of most Americans has transformed from one of self sufficient, hard working, calculated risk takers to one of risk adverse guarantee seekers. They want someone or something to guarantee that with minimal effort they will reach some modest level of success. They like the idea that someone has their back when the reality is no one and nothing can save them from a life of low level mediocrity or worse and if they fall hard there will be no one to pick them up…but they like the idea there will be.
Regarding the idea that you waste your vote if you don’t vote for one of the 2 major parties… I believe that I wasted my vote if I don’t vote for who I believe is the best candidate regardless of party. Did you wast your vote voting for Gore or Kerry (Dems)? Did you wast your vote voting for Bob Dole (Rep)? None of these guys won either!
jmd_forest
well, Jim Cramer was raving this morning about how it’s going to improve things. :biggrin
http://news.yahoo.com/s/ap/20080908/ap_on_bi_ge/mortgage_giants_consumer_impact
Mortgage rates dropping because of the gov takeover.
Of course it’s good news… for some.
Govt takeover = lower risk in mortgage secondary market = more capital available = lower rates
(consider this a shot-term, good news “bounce”)
However, inflation is still a major Fed concern. Rates could be raised next Fed meeting.
Cramer thinks this is a good move from the point of a Wall Street’er. I guess if I had shares of Fannie/Freddie, especially preferred shares guaranteed to foreign investors, then I’d be jumping for joy, and have a great day on the exchange with more "irrational exuberance. " Or, if I were getting a boost to my stocks because there’s a savior for Fannie/Freddie I’d be thrilled as well. This was a temporary shot-in-the-arm for Wall Street for these reasons. But, I believe it’s a short-lived bounce that will fade quickly as the reality of the bailout begins to affect the economy.
Bottom line is the guys who allowed this unholy marriage of private sector and government–the ones who allowed this mess to occur, now own the whole kit-n-kaboodle! If they mismanaged this bureaucracy before, what can we expect now?
While this move may make jittery investors holding worthless paper feel good, it should make taxpayers SICK!
We’ve been through this all before. We apprently didn’t learn any lessons. And, we don’t hold anyone accountable, neither last time nor this time. In fact we rewarded the bums who mismanaged FM/FM all these years with muti-million dollar severance packages–albeit, not the $110 million rewarded to Countrywide’s Angelo Mozilo for his stellar performance, but only a paltry $9.4 million (in addition to the $12.4 million in compensation and options since 2004) to tie Mudd over until he finds another ship to sink.
Corporate raiders always celebrate when they know the good faith and credit of the US Govt. confirms that they’ll bail out the perpetrator of the biggest act of fraud know to mankind. The only problem is that WE, THE PEOPLE ARE THE REAL BAILOUT.
We either pay taxes, or we devalue our monetary system as the printing presses crank out another several hundred billion to “pay” for all this. It’s getting so bad that I advise my parents to get their savings out of dollars and into tangible assets to avoid the raping of their purchasing power by the Feds.
Well, I’ve again had my catharsis. I thank you for being part of it.
Jimbo
You guy’s are ALL missing the point!!!
WHY, WHY, WHY, would the U.S. bail out these giants??? Is that the question you want answered???
VERY SIMPLE…
YOU LET THEM BLOW UP…THE PLANET’S FINANCIAL SYSTEM GOES WITH IT!!!
Look…The BUSH administration DID NOT want to bail ANY of these companies out. The alternative is a financial MELTDOWN that would have blown up a lot of guy’s reading this post. We would have had banks LITERALLY calling in mortgages. Investors NOT buying and OWNING properties with 100% CASH would have gottn KILLED by insanely high interest rates. I don’t care if you have a SINGLE Freddie or Fannie backed mortgage your BANKS DO!!! And THAT is the sole reason this was not about to be turned over to “market forces.”
So we have a bail out of Bearn Stearns, of Freddie and Fannie, Next up the U.S. Automakers by way of low interest loans. Approx. $50 BILLLION worth. Want to see the entire central part of America BLOW UP economically??? Then just let GM, Ford, and Chrysler go belly up!
That will DESTROY that region of the U.S. Let me repeat this…NO POLITICIAN, in EITHER party, wants to add KILLER OF GM or FORD, or Chrysler to their resume. NOT GONNA HAPPEN!!
Gentleman…you can either GET ON THE TRAIN or you can wave to it as it goes by you???
The die has been set. This is a DONE DEAL…
This is THE NEW WORLD OF FINANCE. It’s tied together on a GLOBAL SCALE. If one goes down (especially if it’s THE BIGGEST “one”) THEY ALL GO DOWN TOGETHER!!! It doesn’t matter if it’s a country or a business your talking about. Germany is IN recession, along with ITALY, ENGLAND, SPAIN, IRELAND, FRANCE and MOST of what’s left of Europe…WHY…because the AMERICAN ECONOMY has SLOWED. This isn’t MY opinion, this is DIRECTLY from the mouths of foreign economists.
So…it looks like the “sub-prime meltdown” actually WAS NOT contained AT ALL.
It looks like the SLOW DOWN (really a recession, but that’s a dirty word) in the U.S. that the experts said WOULD NOT effect other countries is actually KILLING thier economies.
It looks like the likely hood of a MAJOR U.S. Auto maker going BANKRUPT in this enviroment is HIGHLY UNLIKELY. I’m sure seeing a 100 year old ICON like FORD, pad locking their doors and firing tens of thousands would do WONDERS for the AMERICAN consumers confidence and thus our economy…so there it is…the seeds have already been planted for the NEXT helping hand!!
Anyone here buy any PUTS in Fannie and FREDDIE??? They damn near ANNOUNCED this take over a MONTH ago!! The puts went up 300% OVER NIGHT!!!
Who’s smart enough to buy those FORD calls NOW???
Jake,
I have 5K I could invest in Ford. Would I simply sign up with Scottrade and buy as many shares as I could with it? This would be my first time investing money this way.
Thanks,
Brian
bcampbell
A month ago Jake was ranting about how the new CEO of Ford was going to turn them into the new version of Toyota. Now it is the US Government that is going to complete the turnaround. You may want to do a bit more research before you go and drop your 5k. Jake (or Pete) has a history of ranting and raving about gloom and doom.
Other than saving Fannie from collapse, can someone explain why everything is suddenly hunky dory now, according to the media? The way I see it the bad loans were just transferred from one place to another. (although I admit I know little about this issue)
Let me explain this a little more…
A few months ago, I and a MILLION other Ford share holders, received a nice letter from BILLIONAIRE Kirk Kerkorian offering to buy ALL my shares of Ford at $8.50!! (I framed my letter and didn’t sell a single share) Some people sold their shares…BIG, BIG mistake…but…like the real estate BUST, most didn’t KNOW they screwed up WHILE they were DOING IT!!!
Back to my point…As oil prices shot to $147/barrel, SUV and truck sales tanked and Ford reported a big loss for the last quarter. What wasn’t widely reported was the MAJORITY of that loss was directly related to Ford BUY OUTS of employees. Mullaly is shrinking Ford to match demand. That costs MONEY. Due to that loss…Wall St. in all it’s GLORY, reacted like they always do…they panicked…KIRK KERKORIAN did not…as a matter of fact old KIRK has been ADDING to his holdings at BARGAIN BASEMENT PRICES!!! And so have I!!!
Bcampbell, reread every post I have ever written here…I let YOU decide who has been right about what we are currently LIVING THROUGH.
Here’s my advice…This is a RISKY investment… If LOSING a chunk of that $5000 is going to HURT you …DON’T DO IT…
If it’s just FU money then here is EXACTLY what I would do with your $5000.
Open your Scottrade account and have them send the paper work for an OPTIONS account. Once it’s open…Take what ever amount you decide and buy the Ford January 2010 $7.50 CALLS. They closed tonight at .98 REMEMBER THAT!!! On Sept. 9th. those options were 98 cents!!! You can write back in when they double over the next year. Then Thank me and we’ll all see where we stand.
What your buying is the RIGHT to buy Ford stock REGARDLESS of price, at $7.50/share all the way out till January 15th 2010. You can sell those options at ANYTIME up till january 15th 2010. As a matter of FACT, those EXACT options traded at $3.50 (almost 400% more) when Kirk made his $8.50/share offer!!! If you decide to blow them out in a few months or a year for a nice profit you can. But…You could LOSE too. This isn’t “playtime” here. It’s REAL MONEY and you will experience real results. Even if you DON’T invest…do me a HUGE favor and WATCH those option prices. Remember…You can LEARN without investing a DOLLAR.
Watch what happens to those options (and the stock price) when the Feds make those loans.
What Chris is missing here is the fact that Ford will be cutting it’s current loans rates IN HALF with this deal, as a mortgage broker he should know the value there. He’s obviously also missing the entire lineup Ford is about to bring to the U.S. from it’s European division, which, by the way, MADE $800,000,000 in profit last year!!! Ford Europe builds small, fuel efficient cars that are incredibly well built.
Take a look at www.autoblog.com for a review of the new Ford Fiesta that will be coming here in late 2009. THEY LOVED IT!!!
NOTHING…NOTHING…has changed here as far as my opinion goes. Mullaly is steering this company to a complete rehab. He has already done it once at Boeing. His model for that company??? TOYOTA!!! He suceeded there, and he will with Ford. These events are NOT EASY for people to see. People here flamed me when I said 3 years ago we would have the worst housing crisis in our lifetimes. American car companies are whipping boys now!!! If in 1979 I told you Harley Davidson would become THE most profitable motorcycle company on EARTH would you have believed it??? Remember…The 70’s were the AMF years. I remember going into NEW Harley dealerships and seeing BRAND NEW Harleys parked over cookie sheets so the leaking oil wouldn’t get on the floor. My grandfather bought a BOAT LOAD of Harley shares as soon as he found out who the new CEO was. BUY THIS BOOK… Well Made in AMERICA!! It’s the nuts and bolts story of the Harley turnaround…IT’S A CLASSIC
business story.
How did Harley do it??? They modeled themselves after…
HONDA!!! They actually went over there and learned about…"just in time inventory control, and statistical operator control…which allows an entire assembly line to be shut down if ONE part is found to be defective. This saves the company from having to fixOUSANDS of motorcycles AFTER the CUSTOMERS find the defect…Funny isn’t it??? Harley RE-LEARNED how to build motorcycles from HONDA…and Ford is RE-LEARNING the car business from TOYOTA!!
Sorry Chris… but your out gunned on this one!!!
This kind of investing is CLASSIC contrarian. BUY WHAT NO ONE ELSE WANTS, WHEN NO ONE WANTS IT!!!
I’ll let other readers here speak for my predictions on the real estate mess we’re in and other matters. It’s not negativity…It’s REALITY!!!