“Fast and Easy Fannie”!
Just the way I like it.
can you be civil? Seriously. Not everyone finds that stuff funny. Why you have to demean and debase one of the most important websites the country has is beyond me.
Its a headline that mutates somewhat as it crosses the Atlantic.
Fannie Mae and Freddie Mac are not well understood here. They were set up after the 1930s depression to get the housing market moving , the FM initials both have corresponds to Federal Mortgage .
There is a third smaller one that specialises in buying military veterans mortgages called Sally or Sallie I think.
Their task was to provide liquidity to the mortgage markets as guarantors and as securitisation hoovers.
They should only have bought PRIME and should only have bought mortgages up to a value of about $USD 420k ( if a mortgage was larger it had to be securitised some other way, these are called jumbo mortgages )
It appears that they were buying a lot of what was essentially unchecked subprime from Countrywide that masqueraded as prime.
This is far more serious than any wordplay . Countrywide were the largest providers of dodgy mortgages in the US until recently and could well have badly polluted the system with this program .
However this information is not quite “new”, see here
If I hadnt made the joke, someone else would have. At least weve got it out of the way now and can talk seriously about these things.
Well then talk seriously , what is a GSE and what should it do ??
Sallie Mae is involved in student loan securitisation. I think Ginnie Mae (GNMA) does the veterans.
But that’s beside the point. The US government has been relaxing reserve requirements for Fannie and Freddie so they can load up on even more mortgages, but I haven’t heard of any requirement that they increase the scrutiny of those mortgages. In fact I wonder if it is discouraged.
When an entity becomes undercapitalised. The writing is on the wall. The management and employees will help themselves. Unless there was some moral business undertones lurking around out there someplace; runs, in our days, in the family like a wooden leg
It would not surprise me in the least if much of the recent bad housing loans were just that; staff rip offs. When one has no scruples, it is the easiest thing in the world to do. After all, when does one stop screwing around
The faeces is about to hit the whirrly thing for Fannie. Futures have it -40%.
Make that -50%.
I think things are about to go nuclear
Opened down $7.16 or 46% on last nights close.Suspension very soon methinks.
Uh oh, Moody’s reaffirms US Treasury Debt “AAA”…
You gotta love those pesky US investors,no matter how dire it looks they can always spot a bargain!! At 8pm Fannie up to $10.35 more than a $3 from the open for a mere drop of 22% on the day, looks like a big short covering rally underway. More news on possible bailout below:
Reason for the rally:
Bernanke has announced that Fannie and Freddie can borrow from the Discount Window.In other words-back up the trucks and load with FREE MONEY printed at will by the Fed.Anyone care to predict what effect this will have on the dollar and INFLATION.
Are there enough trees in the world to print the dollar bills Bernanke and Co are going to need?
Wonder did these folks all happen to have some meetings this week where they could have been “asked” to think about the answer if the US was to bail out the FMs…