Freddie Mac and Fannie Mae SEIZED

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freddie mac twn.jpg
Congressman and financial policy wizard Barney Frank (D-MA) is sanguine about these takeovers. He thinks that Treasury Secretary Hank Paulson is taking the right steps and will steady and balance Freddie and Fannie.
My own view is that when the U.S. government — in a time when a not-centrist-at-all Republican occupies the Oval Office — seizes and nationalizes a publicly held firm, then we all had better tighten our belts.
This is not a sign of economic stabilization. It’s a whopper foreshock of more serious problems ahead.
— Steve Clemons

Comments

12 comments on “Freddie Mac and Fannie Mae SEIZED

  1. Charles says:

    Democrats created the Fannie Mae and Freddie Mac problems years ago, in a well intentioned but failed effort to allow low income groups to buy houses. They stopped ALL eforts at reform until it was too late. Now they are trying to blame Bush, McCain and Republicans, everyone but themselves. That’s the Gods truth and here is the proof:
    http://strategicthought-charles77.blogspot.com/2008/09/democrats-created-fannie-mae-and.html

    Reply

  2. Carroll says:

    Freddie and Fannie only keep 10% of their mortages and sell the rest out…so in effect the bailout bails out All the buyers of the Freddie and Fannie mortages. It most likley also bails out all preferred stock holders.
    Picture the S&L bailout the size of a pea and then think of this bailout as a pumpkin…that’s about the difference.
    This bailout will double the national debt…double it. Currently 10% of your taxes go to interest on the US debt…figure on 20% of it after this….and what is the gov going to cut to compensate for it? The wars? The aid to Georgia? Aid to Pakistan? All the overseas adventures and empire and democracy spreading they are addicted to that they smash on the US taxpayer credit card? Or maybe they will tax the richest 240 billionaires in the US to pay our regular domestic bills?
    Watching Orwellington DC and our politicans and think tankers is like watching drug addicts in a room full of free cocaine.

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  3. Mr.Murder says:

    The bailout is SIlverado revisited. Keating as well.
    Only the money has bought up far more than a narrow sector of Senators. It is across the board. Urban renwal loans, wealth transfers for outsourced manufacturing, a paper card house of inflated value and subprimes that was the driving force behind the Bush tax cuts and their claim to have worked.

    Reply

  4. pauline says:

    Steve,
    If I recall, you haven’t done one blog on the one of the biggest cons and shams that Ron Paul reminded American of in St. Paul last week –the smoke-and-mirrors federal reverse banking system.
    Paul was so clear on how unconstitutional the federal reserve banking system is and how the fiat money they’ve created is at the base of our monetary woes. Throw in government spending that’s out-of-control and a federal energy policy that ONLY benefits big oil and congressional incumbents’ campaign chests and, voila, the whole d*mn deck of economic cards blows over into the sewer.
    I guess foreign policy gurus just don’t understand the basics of the phoniness and utter corruptness that fiat currency brings. The fed reserve and the feds responsible for allowing the federal reserve banking system to strangle our economic system are both handing us $3 dollar bills not worth the paper this funny money is printed on.
    Ron Paul is the only one running for national office who’s willing to reveal this financial con game.

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  5. PissedOffAmerican says:

    Tighten our belts? Guess again. You damned well better be planting gardens.
    But don’t worry, Sarah Palin is coming to rescue us, with our not-a-troll Tahoe marching three steps behind, blowin’ on a bugle.

    Reply

  6. Carroll says:

    Can we be honest for a change instead of all this idiot crap over the elections?
    Everything you have seen; from Iraq to Afghanistan to Iran to Russia Georgia to Israel-Palestine to torture to the WS firms bailout to the Katria disaster to our crumbling infastructure to our national debt to our trade imbalance to off shoring our jobs to the illegal immigration problem to oil prices to inflation to drug prices to a corporate media …all of it.
    IS DUE TO OUR CONGRESS
    Their ONLY job is staying in office.
    Don’t you GET IT? The ENTIRE SYSTEM IS BROKEN.
    It’s CORRUPTED beyond repair. All you are seeing now in these events is the chickens coming home to roost.
    Fannie Mae and Freddie Mac PAC Contributions
    Top Six
    Nancy Pelosi – D – $17,500
    Lamar Alexander- R – $19,000
    Rep Melissa Bean- D – $16,999 Financial Services Committee
    Roy Blunt – R- $10,000
    Rham Emanuel – D – $10,000
    Harry Reid – D – $7,500
    Sherrod Brown D – $10,000 Banking, Housing, Urban Affairs
    Eric Cantor – R – $7,000
    John Bonner -R- $7,500
    Center for Responsive Politics
    Good damn luck with the election that is suppose to fix it.
    Money talks and bullshit walks in Washington and you the people are the bullshit.
    IT WILL BE THE SAME OLD, SAME OLD UNTILL IT IS ALL GONE.

    Reply

  7. ... says:

    the way it works in financial markets when trouble becomes well known on the street is this : shareholders and little people – us taxpayer etc – get left holding the bag, while the sleazeballs responsible are already removed to a safe distance… the whole financial system is a huge con game, with everyone turning a blind eye to it with the thought they can benefit from it… capitalism at its finest, or worst depending on where you sit…

    Reply

  8. Bartolo says:

    Reading the NYT on-line article on this, one comes away with no idea of what happens to stockholders, who is to blame, what oversight will apply; and very little about long-term changes being made.
    Maybe this means I will not be affected. 🙂

    Reply

  9. Spunkmeyer says:

    Privatize the profits, socialize the losses. Just wait until Detroit
    starts its massive push for a bailout later this week. And don’t be
    surprised if Wachovia or Washington Mutual are next.

    Reply

  10. DonS says:

    More serious problems ahead for sure. The question is how much the administration is trying to hide under the rug to get through the election.
    That and having to put up with the Bushian doublespeak that is to come blaming it all on “speculators” and too much regulation. After all, free markets fix everything; its the distortion of those markets, by big gommint democrats that causes problems.
    Oh yeah, and how this move does not equate with any of the evils listed above.

    Reply

  11. WigWag says:

    The timing of all this is funny. I can’t help but believe that this was done now so it’s not an issue too close to the election. Making the decision to do this now for political reasons rather than at the most proper time is just more evidence of how terrible the Bush/McCain Republican Party really is.
    Regardless of whether McCain or Obama is elected, the U.S. economy is in for a tough go for a while. Despite it’s recent strength, the dollar will be under pressure.
    I’m selling dollars and buying Euros.

    Reply

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