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wbbgjr
07-22-2008, 08:58 PM
Guys. This could cost us trillions of dollars to bailout the banks. Don't believe the $25Billion figure. Once this gets passed all the bad loans from every bank is going to be sold to Freddie and Fannie so that the taxpayer can own them. Please call your representatives tonight. They are voting tomorrow.

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http://bloomberg.com/apps/news?pid=20601087&sid=aJft6iw0H_Pg&refer=home

U.S. Lawmakers Reach Deal on Fannie, Freddie Bill (Update2)

By Brian Faler
More Photos/Details

July 22 (Bloomberg) -- U.S. lawmakers reached agreement on a rescue plan for Fannie Mae and Freddie Mac that the House may vote on tomorrow, Representative Barney Frank said.

Under a modified version of proposals made by the Bush administration, the Treasury Department would gain authority to inject capital into the two largest U.S. mortgage finance companies, through loans and equity investments.

The agreement is the clearest indication yet that Congress will approve a backstop for the beleaguered companies, which Treasury Secretary Henry Paulson said today is essential for safeguarding U.S. financial market stability. Lawmakers added the provisions to legislation that would create a stronger regulator for Fannie Mae and Freddie Mac and expand federal efforts to stem mortgage foreclosures.

``The package we have got is fully acceptable'' to the Treasury and Senate lawmakers, Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, told reporters in Washington today. ``Nobody is for everything that's in it or got everything in it he wanted, but we negotiated a lot.''

Treasury spokeswoman Brookly McLaughlin said in an e-mailed response to a question that the department is reviewing the language of the bill, which is 694 pages.

Crossing White House

Frank said lawmakers, defying a White House veto threat, decided to keep provisions for $3.9 billion to help local communities buy up foreclosed properties. The Bush administration opposed the idea because it said it would aid lenders who now owned the vacated properties, not struggling homeowners.

``It's clear that the Democrats chose to play politics with the legislation,'' White House spokesman Tony Fratto said in an e-mail, without mentioning any veto plans. He echoed McLaughlin that officials are reviewing the bill.

The Treasury would be barred from providing aid that would cause a breach in the federal debt ceiling under the agreement, a constraint aimed at limiting any taxpayer losses. The debt limit would be raised to $10.6 trillion from the current $9.815 trillion.

The plan would give Paulson power to restrict the companies' dividend payments and require regulatory approval of the salaries of top executives.

Higher Cap

The legislation would also raise the limit on the size of the mortgages the companies may purchase. The new cap would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said.

Frank's counterpart in the Senate issued a statement indicating he backs the bill now progressing in the House.

``We have been engaged in extensive and largely fruitful discussions with our counterparts in the House'' and with Bush administration officials, Democratic Senator Christopher Dodd said in a joint statement with Republican Senator Richard Shelby distributed by e-mail. ``We remain optimistic about the prospects for this legislation.''

Dodd, of Connecticut, chairs the Senate Banking Committee and Shelby, of Alabama, is the panel's top Republican.

Paulson, who proposed a rescue program on July 13, reiterated today the plan is aimed at restoring investor confidence in the two companies.

Slide in Stocks

Fannie Mae has dropped about 45 percent in the past month, and Freddie Mac has tumbled about 60 percent, on concern the companies have insufficient capital to cover writedowns and losses amid the mortgage-market collapse.

Lawmakers wrapped the plan into a housing bill that would create a program aimed to help an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government.

The legislation includes tax breaks to help prop up the housing industry, including what would be the equivalent of an interest-free loan worth as much as $7,500 for first-time homebuyers.

The bill also would allow taxpayers who don't itemize their tax returns to temporarily claim a property-tax deduction, said Representative Richard Neal, a Democrat from Massachusetts and member of the Ways and Means Committee. States could offer an additional $11 billion of mortgage-revenue bonds to refinance subprime loans.

Final Approval

The Senate may vote on the legislation as early as July 24, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada. The bill would then go to President George W. Bush for final approval.

A Congressional Budget Office estimate released today put the cost of Paulson's plan at $25 billion, a figure below the total that some lawmakers had expressed concern about.

``It's pretty good news -- a lot of people thought it would be much higher,'' Shelby said earlier today.

Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about half of the $12 trillion in outstanding home loans.

The companies, which buy mortgages from banks, face mounting losses stemming from the collapse of the subprime home loan market.

Lawmakers rejected a proposal to bar Fannie Mae and Freddie Mac from paying dividends while they are tapping the expanded line of credit with Treasury, Frank said. They decided instead to give Paulson the power to restrict such payments or to take preferred stock in the companies, he said.

``It's not a mandate,'' Frank said. ``He's got to have some flexibility.''

Paulson wanted Congress to grant the Treasury temporary authority to buy stock in the companies and offer an unlimited federal credit line.

fr33domfightr
07-22-2008, 09:09 PM
If this passes, when Fannie May and Freddie Mac writeoff their losses ON THEIR BAD LOANS, the taxpayer will be reimbursing them for the losses, right?!?! So those in charge there won't be accepting the risk!?!? As someone stated in another thread, private profits, public risk.


If Paulson wants to buy securities, he should do it with his own money, not mine!!!!



FF

TastyWheat
07-22-2008, 09:19 PM
Bill number?

AJ Antimony
07-22-2008, 09:20 PM
The worst part is nobody cares.

idiom
07-23-2008, 01:09 AM
America is going to default and you will all be unloved.

Oyate
07-23-2008, 01:23 AM
If this passes, when Fannie May and Freddie Mac writeoff their losses ON THEIR BAD LOANS, the taxpayer will be reimbursing them for the losses, right?!?! So those in charge there won't be accepting the risk!?!?

It's actually way, way worse than that, Ace. The Fed bailed out Bears at our expense and all their execs kept their pay and massive bonuses. The Feds will bail out Freddie and Fannie at our expense and their execs will get to keep everything.

And they are creating meaningless instruments to convert their junk inventory into something marketable, but it doesn't matter because everyone on Wall Street will make commissions.

And here go Watchovia and Walmu. They've been basically insolvent for weeks now but nobody cared to admit it until now. Don't worry, not a single soul who is responsible will ever pay a red dime.

And the way things are set to go, the FDIC will be out of funds long before the lucky insureds get any benefit. And there's the fact that commercial banks aren't FDIC insured. Neither are your safe-deposit boxes by the way. Those are considered assets belonging to the acquired banks until they figure out what to do with them and federal regulators can inspect the contents without you ever knowing once the fed takes over.

I've been hearing people are taking their funds out of Indymac branches and taking them to other banks who....won't accept them for deposit or impose an "indefinite waiting period" to clear them. The banking industry knows what's going on here. The know junk paper when they see it. They're in on the scam.

Oyate
07-23-2008, 01:31 AM
America is going to default

I don't know what "America is going to do" but I know Congress will pass the Fed any new and unconstitutionally mandated power to bail out their precious scam system. While they buy up properties in foreign countries to retreat to as I've been hearing.

And the Fed is going to do one thing: print money and keep interest rates artificially low. Well, I guess that's two things. But it's exactly the wrong way to go.

Now I'll make another round of calls to the idiots, but this is a done deal. Congress will give the Fed whatever new power they want and the Fed will screw us over while rewarding the investor class.

And when I say "screw" I don't mean like "just another stupid tax or rule" I mean really....well, you get the idea.

Now I suppose somebody will get me into the inevitable "inflationary or deflationary" argument with is about as passionate as the "truther" wars.

Oyate
07-23-2008, 01:44 AM
The heck with it. I'll do it now.

You might hear people arguing about whether we're in or are about to be in an "inflationary" or "deflationary" period but I think we're seeing both. We got here by inflationary practices (and like 0 regulation on the financial corporations, bad mistake). Basically an increase in money supply.

But remember, the Fed doesn't print many dollars. They don't print any, they tell the Mint to do it, but the point is they only print enough money so people like us have a way to pay the bus driver.

Most of the "money", as you know, gets created as digital entries in a ledger. In fact, most of it exists as "credit". And as you know, the more of it there is, the less it's worth and so everything is costing more and more. Easy enough when you know how it works, right?

Well the deflationary thing is the contraction of money and credit. Business tends to be inhibited because they can't get enough cash to do their thing. Prices start to go down basically because everybody is about to starve is they don't sell something. Some see this as the "correction" that will restore "balance" or "competitive conditions" or whatever bullshit they can come up with for just having bought your family business or farm for pennies.

Or that's the way the theory goes. It's almost like an "this will happen because it did last time" or "it always has" as far as the deflationary thing. The thing is it's not gonna go exactly how it always has because we've never had more federal meddling in the markets or such collusion with the European central banks.

What I know for sure is they are setting us up for such a fleecing as they hope to break our backs and take what's left of our assets without further trouble to themselves. Inflationary, deflationary, we are oh, so screwed. And oh joy! we haven't even touched on the national debt and how it figures into this yet!

But you guys know all this stuff, right?

Join The Paul Side
07-23-2008, 01:47 AM
This is truly sickening. There is no such thing as accountablility anymore. At least when it comes to the priveledged few.

Bush Administration commits verifiable crimes against Country and Constitution and will walk away from it without a charge, and filthy rich.

Wall Street gambles and loses and gets rewarded off me and my children's blood, sweat, and tears.

But if you or I were to commit a crime and get caught, surely Johnny Law would prosecute us to the fullest extent.

If you or I gambled away our finances there would be no bail out.

May God Damn all these bastards.

:mad:

idiom
07-23-2008, 01:59 AM
Actually the Govt. is screwing the investment class too.

There is no tidy way out of this if the buy outs go ahead.

Congress just can't say no to a bad idea.

Oyate
07-23-2008, 03:34 AM
Actually the Govt. is screwing the investment class too.

In all likelihood, if you are talking about persons in the $3M and below category of total "worth", you are correct. The coded message for Bush's recent statement that "Wall Street got drunk and now it has a hangover" goes hand in hand with the recent vilification of "speculators" and "shorts".

And the horrible irony is that the only "speculators" and "shorts" in most of our investment classes who made money are the genuinely smart. Most of us got soaked on this mutual fund and IRA bullshit that everybody who sold it knew was absolute garbage.

This is the derivatives doom we knew would come. All your houses, all your mortgages, all your home equity loans, all your debt ended up getting packaged up into these new "asset instruments" and when the property values their cooked books depended on imploded, so did their balance sheets. And you can bet they are hiding everything they can.

That's why people who try to save themselves from foreclosure end up having a hard time figuring out who the heck they can talk to to do a deal. Believe me, I get people asking me that all the time.

But that's why things are even worse now because the banks and financial houses have to take massive writedowns on their balance sheets. A ton of banks are insolvent. Everybody knows it.

You guys know this stuff, right?

Anybody still need to be told what to do? Anybody at all.

I been doing personalized doom and gloom advice for people for a few years now and the people who had the most to loose who listened, I think they'll name their firstborns after me. More recently, you still have plenty of time to set yourself up. Times are changing and the advice changes with it.