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| User Info | Reason for FNM/FRE Rush job becoming clearer in forum [NotSoBreaking] | |||
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Emb145 Posts: 8182 Incept: 2007-08-25 
Orlando, Florida 
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Everything is being backstopped: Fed Loans to Failed Banks Made Easier by Fannie-Freddie Rescue By Craig Torres July 31 (Bloomberg) -- The Federal Reserve will be able to lend more easily to failed banks under government control because of a provision in legislation that bailed out Fannie Mae and Freddie Mac. In the rescue signed into law by President George W. Bush yesterday, the Fed will no longer have to pay penalties on loans it makes to institutions taken over by the Federal Deposit Insurance Corp. http://www.bloomberg.com/apps/news?pid=2.... Can you say large bank failure imminent? ---------- It's the age of hobos: Prepare to teach your children how to grift. Last modified:
2008-07-31 00:57:18 by emb145
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Seabassbanker Posts: 2622 Incept: 2008-03-09 
HELL IF I KNOW
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IMB...now that they cant be shotgunned likely they are getting liquidity from FED
---------- October 15th, 2007 Bernanke: "It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions." LIAR LIAR 2008-07-31 01:28:16
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Robw Posts: 423 Incept: 2007-08-10
Southern California
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Must have snuck that one in on page 699. Slimey Ben, slimey!
2008-07-31 01:57:11
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Etz3l Posts: 8658 Incept: 2007-06-26
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Swimming against the current until all efforts are exhausted makes perfect sense. Nobody would blame a victim for trying. Keep swimming pigs! ---------- I could slit my wrists and people would cheer - L. Blankfein.  http://www.youtube.com/watch?v=p8jm61vk2.... Last modified:
2008-07-31 03:51:01 by etz3l
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Rdm Posts: 211 Incept: 2007-07-27 Greed is good... This is the Valley of Death...
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Quote:The original provision was aimed at preventing the central bank from keeping failing banks open. ---------- Now that's what I call fear mongering.  Rep. Brad Sherman - House floor, 20082008-07-31 03:06:07
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Cobra2411 Posts: 5826 Incept: 2007-06-26
Dark Side of the Moon
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I've got three theories that I like explaining the ramjob.... Don't know what one is correct, but this supports one of them... Top Three Theories: 3. A foreign CB threatened to firesale bonds spiking the yield. 2. Many bank implosions are imminent and they want the $800b to backstop them using F&F as a cover story. And the #1 theory... Someone has a picture of Paulson ****ing a goat... And the goat looks unimpressed  #2 didn't fit because of time. It'll take too much time for the bailout gears to start working, but if they're accepting the failures and are looking to support the FDIC so it's not totally annihilated... That fits.... I know that Ben's stoking his ego and using his thesis playbook, but I'm not so clear on Hanky's motivation... Hence the goat theory. But the save the FDIC theory fits too... And of course you wouldn't want to come out and suggest that the FDIC is likely to need some help. ---------- "These are the times that try men’s souls... Tyranny like hell is not easily conquered yet we have this consolation with us, the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value." -- Tom Paine 2008-07-31 05:51:37
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Gen_maximus57 Posts: 2019 Incept: 2007-09-03
Overseas
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Cobra -- Dont discount the goat theory... Does anyone have a picture of Hank and the Goat??
---------- Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. 2008-07-31 06:13:44
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Rmonical Posts: 2114 Incept: 2007-07-04
Omaha
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".. but I'm not so clear on Hanky's motivation... " Hank is a banker. Who holds all the bad paper? Bankers. ---------- The truth is out there 2008-07-31 06:15:06
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Swingtrader Posts: 5544 Incept: 2007-08-12
United Oligarchic Goldman Sachs States of America
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Quote:Swimming against the current until all efforts are exhausted makes perfect sense. Nobody would blame a victim for trying. Yep. They will try all of this and more. While I disagree with them, I can readily understand their trying. ---------- Vegasradar wrote.."Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end." 2008-07-31 07:10:52
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Shondven Posts: 592 Incept: 2007-08-06
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I think the foreigners who own 4/5 of FNM and FRE debt made it crystal clear to the Bush administration and Congress what would happen should the GSEs be allowed to collapse.
2008-07-31 08:11:20
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Biobiox Posts: 380 Incept: 2008-02-19 If you can't change your mind, maybe it's broken
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Quote:And the goat looks unimpressed 
---------- Everybody ought to love his job, and live his life and keep his pride Imperturbably happy with the one you love With an exciting future on the fat of the land 2008-07-31 08:21:19
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Schwantz Posts: 4681 Incept: 2007-11-12
Monkey Do
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Anyone know why the penalties were there in the first place? To prevent the Fed from interfering with FDIC control of banks they've taken over?
---------- Dives sum, si non reddo eis quibus debeo Smash the Keynesian idiocracy! 2008-07-31 08:27:52
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Strongholder Posts: 339 Incept: 2008-04-01 The Jerz
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It says in the article the provision was there to keep the Fed from keeping failing banks open too long. I guess if they penalize money to failing banks there would be an incentive to get them closed or taken under sooner. Which makes me think they realize there are going to be too many failures to handle expeditiously and without penalty...so they changed the rule. 2008-07-31 09:18:12
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