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Government Seizes Fannie, Freddie Mac


Business  (tags: US Treasury Department, Fannie Mae, mortgages, banking, Hnery Paulson, Freddie Mac )

RC
- 3905 days ago - nytimes.com
The US Treasury Department has taken over the quasi-public Fannie Mae & Freddie Mac mortgage lenders. Treasury Secretary Henry Paulson has fired the heads of both companies & put in hand-picked replacements. He said a "rescue plan" will be implemented.



   

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Comments

RC d (418)
Sunday September 7, 2008, 3:36 pm
Somehow, the government taking over gigantic financial institutions like this frightens me...can't quite put my finger on it. Yes, Fannie & Freddie had problems, but...are we sliding into another Great Depression? That's the last time the US saw this kind of nationalization, and when America recovered financially, the controls for the most part were dismantled. I wonder if the Feds today will ever let go of anything they seize?
 

RC d (418)
Sunday September 7, 2008, 3:40 pm
Paulson: "“Government support needs to be either explicit or nonexistent, and structured to resolve the conflict between public and private purposes. We will make a grave error if we don’t use this time out to permanently address the structural issues presented by the G.S.E.’s,” he added, a reference to the companies as government-sponsored enterprises.

In other words, it's the government's way or the highway. I wonder how many other "quasi-public" entities out there might be subject to the same reasoning and action? Anyone have any idea? Move over, MCain't - finance isn't my strongest suit either.
 

Nevaeh M (75)
Sunday September 7, 2008, 3:59 pm
Giving money and power to government is like giving whiskey and car keys to teenage boys,A government that is big enough to give you all you want is big enough to take it all away. thanks noted.
 

Gayle M (444)
Sunday September 7, 2008, 4:03 pm
Why couldn't we just let the badly run corporations fail without all the "bailouts" The people making these decisions that ran all the banks & such into the ground are getting golden parachutes when fired, and we are paying for this ???
 

Marion Y (322)
Sunday September 7, 2008, 4:04 pm
We are already in the beginning stages of a depression. Thank you Cate.
 

Joycey B (750)
Sunday September 7, 2008, 4:11 pm
This is all too scarey for me.
 

Jennifer Langer (72)
Sunday September 7, 2008, 4:28 pm
Wow. I don't think this is what or founding fathers intended for the country. I wonder how we can change all this.
 

Tj H (14)
Sunday September 7, 2008, 4:28 pm
Cate your getting slow girl ... had this on UK news net 6hrs ago, what took ya???
Scary it maybe, but maybe not as scary as the result of them doing nothing, the intercedence may just be a timely halt to a severe fall but don't expect to see the positive effects for a few months yet.
 

Blue B (855)
Sunday September 7, 2008, 4:30 pm
The RepubliCON Bu$h administratino is known for bailouts, remember Silverado Savings & Loan, the biggest bank robbery in history? Thanks to the Bu$h brothers.

RepubliCON$ count on American voters having very short memories.
 

Evelyn Z (300)
Sunday September 7, 2008, 4:37 pm
As far as I can see, Fannie Mae & Freddie Mac Big guys financed mortgages for VERY low income peoples that couldn't afford a mortgage anyway. Now ALL U.S. taxpayers (except the elitest, of course) will be paying the cost of the "take-over" and the "mortgaged" homes will be seized anyway! Just more empty houses sitting around here that no one can afford to buy.
 

RC d (418)
Sunday September 7, 2008, 4:45 pm
Btte me,Tj...we're five hours behind you...LOL
 

David Gould (155)
Sunday September 7, 2008, 4:52 pm
In the UK the Government had to take over a mortgage bank last year called Northen Rock...it has been a disaster from start to finish...and cost us the tax payers billions and billions of pounds. When will govnments learn that they cannot do this and win...an open ended agrement is not a good idea...they cannot bail out every ailing finnacial institution.

Over here the bottom has at long last fallen out of the housing market which was becoming a cruel joke based upon greed. If prices go on falling people will be able to afford to buy again...but in the meantime it is apainful time as you see theprice of your property plummet.
 

Liz De Witt (53)
Sunday September 7, 2008, 4:57 pm
With all of the job-lesses we see into recession. I don't know how people will be able to afford home ownership. Clearly here the housing market has dwindled. The only people will be the professionals who make much more than the common man.
 

Louise L (48)
Sunday September 7, 2008, 5:16 pm
I'm just hoping that all those same people who got in over their heads before are not going to do the same thing again. I don't mean to sound pessimistic, but what ever happened to actually READING the contract before you sign it? They need to be a little picky who they allow to buy $$$$$ houses. Like have $$$$$ income, maybe? Thanks, Cate.
 

Morgan Griffith (225)
Sunday September 7, 2008, 5:17 pm
Loans that should have never been made to people who really did not understand what they were getting themselves into and never imagined that there could ever be massive foreclosures. America needs to realize at some point we can't all live large, sometimes you just need to live to your TRUE means. Now the government is trying to run around and pick up all the loose threads and knit them into some sort of financial security. Me thinks it can't be done.
 

Gail L (30)
Sunday September 7, 2008, 5:34 pm
This very scarey
 

Rachel Markel (27)
Sunday September 7, 2008, 6:04 pm
Pretty sure that we are not getting the full story here! While everyone is going crazy over this Sarah freak our country is slipping further and further into what, only time will tell.
 

Yvonne White (229)
Sunday September 7, 2008, 6:17 pm
Well I thought these two were Federally Run to begin with - it's when they Privitize that things really go to hell..
I HOPE Obama/Biden Keep Hitting Back on Economics!

"...McCain's major domestic issue in the election, moreover, is the economy and the rocky time many middle class Americans are having. All the polls show that he needs to offer something tangible to counter Obama's reconstructed Clintonomics and universal healthcare. By his own admission, he has never been that interested in economic issues. And his vulnerability is the sense that he doesn't get how distressed many Americans feel. So who does he pick? A governor whose state is essentially an oil company and whose major problem in the two mintes she has been in office has been what to do with a $5 billion oil surplus! She decided to send half a billion dollars' worth of checks to every Alaskan this summer. And people wonder why she's popular in her state.

It would be very hard to pick a governor in America who knows less about the struggles of most Americans in the current economy. Alaska's economy is currently like Russia's: booming because of commodity prices. And her one key policy issue in Alaska has been drilling for oil in the protected Alaskan National Wilderness Reserve - a policy McCain, against most of his Republican colleagues, has always opposed! Oh, and she's against protecting the polar bears as well. This is McCain's green conservatism: building pipelines, drilling in protected wildernesses and screwing the polar bears."

THAT all needs to be repeated over & over, just like RepubliCON mantras!


 

Jillyanne Michelle Cape (718)
Sunday September 7, 2008, 6:26 pm
This really is huge. I used to work in the mortgage industry, I know what it means. For the government to make a move of this magnitude, you can bet that the market is really in trouble, regardless of what you might hear from anyone to the contrary. Yes, we are in for some tough times. I think most of us already know this but those that don't really need to wake up.
 

JOSSIE ROSS (62)
Sunday September 7, 2008, 7:30 pm
REMEMBER EVERYONE, ITS COSTING $350,000,000. MILLION A DAY FOR THE WAR & ALL OF YOU ARE PAYING FOR THAT......
 

Marion Y (322)
Sunday September 7, 2008, 7:34 pm
Yes, Jillyanne, we are in BIG trouble. I think this article says it all...

US WAVES GOODBYE TO PROSPERITY AND DEMOCRACY

“Today we are seeing panic at the top while Joe Sixpack is behaving with the sort of calm we should be seeing at the top,” warns top Australian financial journalist David Hirst in his frightening report titled “US Waves Goodbye To Prosperity And Democracy” and whose words are worth repeating here:

“THE events of the weekend begin the greatest intervention in the US economy by the Federal Government since the Great Depression, with the Bear Stearns rescue but a splutter on this road we must now travel.

If you were wondering what all the flag-waving at the Republican convention has been about, it is now clear. Americans are waving goodbye to the prosperity the nation has enjoyed since the Great Depression and a final goodbye to democracy. But while preparation for the most important decision made in the nation's post-depression financial history towered above the conventions, I don't think the fate of Freddie and Fannie and the remaining government-sponsored enterprises (GSEs) was mentioned during either convention.

And the politicians. President Bush has long authorised the Treasury to open its purse strings and, naturally, Treasury Secretary Henry Paulson said he did not expect the line of endless taxpayer credit to be used. This is like signing an authority to go to war and saying we don't expect to go to war. Once the authority is given, it will happen. It was always laughable to expect otherwise. Paulson "briefed" John McCain and Barack Obama on the "plan". The fact is that while America, and the world, wait to see who will govern, Mr Paulson has decided to take matters out of the politicians' hands.

They willingly agreed. The ultimate political power, to spend taxpayers' money, has been tossed away. Obviously the economy is too important to be left to the politicians. Instead it is to be put into "conservatorship". It has come to this.”

To the staggering magnitude of this catastrophic financial event we can read as reported by Britain’s Telegraph News Service in their article titled “US Government Stages World's Biggest Bail Out”, and which says:

“The world's biggest financial bail-out was staged by the American government in a bid to ease the global credit crisis. The country's two biggest mortgage companies were nationalised amid fears that their bankruptcy would have triggered an economic collapse.”

To how this first-ever nationalization of corporations by the United States Government will affect its citizens it is almost beyond describing in any other terms than the largest theft in human history as these unsuspecting peoples, and without having had any say in the matter whatsoever, are now saddled with the added catastrophic debt of over $5.3 trillion, and which adds to the nearly $10 trillion they already stand obligated to pay.

Even worse for these Americans, is that not only have they been saddled with this horrific financial burden, the losses they will suffer will total in the billions of dollars more as their 401K retirement programs, and who are substantial holders of these mortgage giants debt, will be lost entirely as with the US nationalization of Fannie Mae and Freddie Mac they will be totally ‘wiped out’ as the only debts to be paid will be to the foreign central banks, like China’s and Russia’s, holding substantial shares in these now bankrupt companies.

To those Americans we had been warning for the past few years of these events now occurring (such as our June 28, 2007 report titled “US Banking Collapse ‘Imminent’ Warns French Banking Giant” we could not counter their all pervasive propaganda media outlets who even as late as August 28th were stating, “While analysts have said fears over Fannie and Freddie may be overblown—Lehman Brothers is projecting that Fannie may not need to raise more capital—the companies are still expected to post steep per-share losses through the year, and the stocks themselves are widely considered unstable.”

It goes without saying that the average American, Joe Sixpack, doesn’t even have the ability to understand this seismic shift that has just occurred to their once great Nation, but this cannot be said of the peoples of other Nations…such as those of Brazil and Argentina who in rapid response to these US actions signed an emergency pact to ban the US Dollar from being used in export payments made between these two South American Nations.

Russian economists are further stating that many more Nations will also rush to enact new laws to ban the use of US Dollars as almost all of the OPEC Oil Nations have already done and which will ultimately lead to the total economic collapse of the United States, and much sooner than the American people even realize.

Though staring these Americans right in their very eyes, this new financial catastrophe is but one more piece of the greater puzzle called Total World War, and which even to this very moment they still fail to comprehend, and in failing to do so prepare themselves more as victims than as survivors of the greater apocalypse to come."

http://business.theage.com.au/business/us-waves-goodbye-to-prosperity-and-democracy-20080907-4bhr.html
 

Denice G (45)
Sunday September 7, 2008, 8:57 pm
Tough times are coming, or should I say tougher times. Things are going to get worse before they get better. This is a scary time.
 

Ken S (38)
Sunday September 7, 2008, 9:41 pm
The pundits predicting the collapse of large sized banks have been proved right......how long before the Amero goes into circulation????? unfortunately the same pundits predict that the ordinary US citizen will pay VERY heavily for this folley. (or criminal activity) The big players have already moved their money into Euros about 4 years ago.These fiscal gymnastics are to make the middle class poor, and the poor............do not even want to think about it. and for the master manipulators, even more obscenely rich.....don't they realize, you can't take it with you after your dead????It concerns me greatly,as to how bad your economy will get. If you pray, it may be too late. This will affect us all to a more or lesser degree, in every corner of the world.
 

Past Member (0)
Sunday September 7, 2008, 10:52 pm
Lyn writes:

"As far as I can see, Fannie Mae & Freddie Mac Big guys financed mortgages for VERY low income peoples that couldn't afford a mortgage anyway. Now ALL U.S. taxpayers (except the elitest, of course) will be paying the cost of the "take-over" and the "mortgaged" homes will be seized anyway!"

Yes, that's part of it Lyn.

Mae & Mac also financed a lot of student loans; those loans are now controlled by the government.
 

Past Member (0)
Sunday September 7, 2008, 11:06 pm
As far as student loans go, I'm not sure if it's a good or bad thing yet. I graduate college in May; I guess I'll find out then....
 

Pete Conrads (91)
Monday September 8, 2008, 1:05 am
I saw this coming (Mae & Mac) way back in 2003 and did not listen to my adviser regarding gold (234.00) ha ha,

one lifetime i will get it right lol!
 

CHRISTIAN RYAN (11)
Monday September 8, 2008, 1:24 am
The only bad thing about gold id if they decide to they can pick it back up and silver to just like FDR pulled the good bank notes. I am afraid to keep any $ in a bank I do cash and keep savings hidden but if the dollar melts its no good to me anyway so I am all confused as to which way to turn. I aggree with the comment about giving control of agencies to Washington is like giving then some JIM BEAM or Jack Daniels ha! chris
 

Dolores H (2)
Monday September 8, 2008, 3:27 am
The chief CEO's were replaced, but were they fined? They should be held accountable for the poor lack of judgment and their greediness.
 

pete O (242)
Monday September 8, 2008, 7:57 am
Is the national reserve really a national bank ? I spend to much time reading conspiracy stuff to know what to make of this ?!?!
 

Marion Y (322)
Monday September 8, 2008, 10:58 am
Ken...I believe you are right. Those in the know have already moved their money to euros, or have left the US altogether and converted to the new country's money. It is too late for those of us here. We will have to bite the bullet and take the fall. As you said "more or less" which I think mean where each person stands on the wealth scale.

Michael...good luck with college and the loans. Are you going for a "green" career...

 

Marion Y (322)
Monday September 8, 2008, 11:29 am
Pete Odonnell...the federal reserve (FR) is a corrupt system devised by the controlling bankers of the early 1900s who fooled Americans and the president into thinking the FR would protect the US from the very same bankers who concocted the devious FR which is the system we use today. The background story of how the FR came about is ugly. Where we sit today with the FR is the ugliest possible situation, and I fear for the US and the world, unless a miracle happens. For an understanding, read on:

The Creature from Jekyll Island: The Federal Reserve
http://www.bigeye.com/griffin.htm

"why the secrecy? what's the big deal about a group of bankers getting together in private and talking about banking or even banking legislation. And the answer is provided by Vanderlip himself in the same article. He said: "If it were to be exposed publicly that our particular group had gotten together and written a banking bill, that bill would have no chance whatever of passage by Congress." Why not? Because the purpose of the bill was to break the grip of the money trust and it was written by the money trust. And had that fact been known at the get-go, we would never have had a Federal Reserve System because as Vanderlip said it would have had no chance of passage at all by Congress.

"So it was essential to keep that whole thing a secret as it has remained a secret even to this day. Not exactly a secret that you couldn't discover because anybody can go to the library and dig this out, but it is certainly not taught in textbooks. We don't know any of this in the official literature from the Federal Reserve System because that was like asking the fox to build the henhouse and install the security system.

"...a very important thing that we didn't know is the cartel. There's even more to it than that. Perhaps the third ingredient is the most important of all and that is the realization that this cartel went into partnership with the government. Now we have hold of something extremely significant. Cartels often go into partnership with governments because they need the force of law to enforce their cartel agreement but in this case they did it in spades."

The Federal Reserve
http://www.bigeye.com/fedreser.htm


 

Marion Y (322)
Monday September 8, 2008, 11:36 am
The value of the US dollar since 1972 under each president:

1972 - 120 (the high mean) (Nixon 1969-1974 destroyed reserves) REPUBLICANS

1974 - 110 (steadily dropping) (Ford 1974-1977) REPUBLICANS

1978 - 82 (low mean) (Carter 1977-1981 - raised reserves in 4 years) DEMOCRATS RAISED RESERVES

1982 - 118 (rising) (Reagan 1981 - 1989 destroyed reserves in 8 years) REPUBLICANS

1985 - 170 (topped) (Reagan

1986 - 120 (dropping) (Reagan

1987 - 96 (dropping) (Reagan

1988-1995 (hovered in this dropped range) Bush Sr 1989-1993 Clinton 1993-2001

1997 - 90 (rising) (took Clinton 6 years to build reserves) DEMOCRATS

2001 - 120 (starting the great descent - Bush Jr 2001-2009 - ruined us in 8 years) REPUBLICANS

2005 - 80 (low mean - still dropping)

2008 - 70 (CRISIS - and steadily dropping...)
 

Deborah Hooper (59)
Monday September 8, 2008, 3:46 pm
unconstitutional
 

Mary Neal (183)
Tuesday September 9, 2008, 2:33 am
Too bad this happened now, putting such a huge financial responsibility into such irresponsible hands.

Mary
 

Mary Neal (183)
Tuesday September 9, 2008, 2:36 am
Regina, thanks for this article!

Marion, thanks for that great table!

I learn so much since joining Care2. Thanks everyone.

Mary
 

Tsandi Crew (95)
Tuesday September 9, 2008, 10:51 am
This was as trick by Bush to give the republicans a tool against the Democrats who signed off on it, not knowing that Bush would change the way it was executed....not the way it was written when it was signed off on by the Senate! THIS IS DIRTY POLITICS RELATED TO THE ELECTION!
 

Edwin Purcell (178)
Tuesday September 9, 2008, 8:44 pm
If the predatory lenders were allowed to collapse, the folks who had the mortgages could stay in their homes. But the government wants to be sure that the greedy bankers get their money- which they should have lost due to their own miscalculations.And they want to pay them with our money!
 

Joan Mclaughlin (133)
Wednesday September 10, 2008, 2:48 pm
A very scarey situation.
 

Blue B (855)
Thursday September 18, 2008, 4:56 am
John McCain: Ha ha, google “bank collapse McCain” and you will find some fun results that old Walnuts had hoped were forgotten forever, because who remembers boring things like the Savings and Loan apocalypse or the Keating Five? Also, one of his sons just fled the board of a failed bank in Nevada!

Phil Gramm: Hateful old banking industry Texan crook was/is John McCain’s Economy Czar. He’s the one who called America a “nation of whiners” for being sad because of the New Depression. He also sponsored the deregulation that created the financial collapse. Gramm is also a vice-chairman at UBS, which is about to collapse, too.
 
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