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Thread: Freddie Mac seeks further $10.6bn in US aid

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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by PeteEU View Post
    So, tell me.. when someone goes belly up.. what happens?

    They for one have to realize all assets no? That is 55% of the US mortgage market. How do you do that? By selling it to the people? Renting out? Selling to the private sector? Remember we are talking about over 6 trillion dollars worth of assets.

    While all this is going on, you have 55% of the US population living in homes they dont know if they will be able to live in the next day. What do you think that will do to the economy?
    When someone goes belly up they fail and in our society that is going to happen no matter how much social engineering you do. How many of those people who defaulted the first time are defaulting again after being bailed out?

    Stop thinking with your heart and think with your brain. Why would anyone buy something that they cannot afford? Does the word personal responsibility have any place in your world?

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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by PeteEU View Post
    So, tell me.. when someone goes belly up.. what happens?

    They for one have to realize all assets no? That is 55% of the US mortgage market. How do you do that? By selling it to the people? Renting out? Selling to the private sector? Remember we are talking about over 6 trillion dollars worth of assets.

    While all this is going on, you have 55% of the US population living in homes they dont know if they will be able to live in the next day. What do you think that will do to the economy?
    Ah, so refusing to offer Freddie this $10.6b would result in 55% of the US mortgage market collapsing? I think you're missing a few steps somewhere in there.
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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by RightinNYC View Post
    Ah, so refusing to offer Freddie this $10.6b would result in 55% of the US mortgage market collapsing? I think you're missing a few steps somewhere in there.
    If the refusal in the 10.6 billion caused Freddi to go bankrupt, many of mortgages that it has either securitized or insured might be called in being one issue

    Another issue is that Freddi and Fannie are right now are backing over 80% if I recall correctly of all new mortgages in the US, at a low interest rate. (at least lower then what private institutions would be willing to offer. If Freddi and Frannie no longer were backing new mortgages, the housing market would take another large drop in demand. Such a drop in demand would lead to another drop in housing prices, and of course more strategic defaults and foreclosures
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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by PeteEU View Post
    Yea let em fail, and watch 60%+ of Americans get forced out of their homes. Long live the rich, screw the middle class and poor!
    If we are going to keep throwing tax dollars in Freddie Mac's hole, we're all going to be out of our homes. The money we give them goes straight into the corporate elite's pocket, not to the employees. If we give Freddie Mac another bailout, next year they will come back asking for more.
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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by Phantom View Post
    If we are going to keep throwing tax dollars in Freddie Mac's hole, we're all going to be out of our homes. The money we give them goes straight into the corporate elite's pocket, not to the employees. If we give Freddie Mac another bailout, next year they will come back asking for more.
    Freddie and Fannie need money because of the recession. Because normally solvent people are not able to make their mortgages. And that all comes back to what the private sector did to get the US into the crapper it is in now..
    PeteEU

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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by PeteEU View Post
    Freddie and Fannie need money because of the recession. Because normally solvent people are not able to make their mortgages. And that all comes back to what the private sector did to get the US into the crapper it is in now..
    I agree, lack of regulation caused the problem but what I don't agree with is your solution to the problem. We can't keep throwing money in the hole and pretend things will get better. This bailout will go straight in the corporate elite's pocket, not to the middle class. They will do what they always do... Take the money and run.
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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by Lord Tammerlain View Post
    If the refusal in the 10.6 billion caused Freddi to go bankrupt, many of mortgages that it has either securitized or insured might be called in being one issue

    Another issue is that Freddi and Fannie are right now are backing over 80% if I recall correctly of all new mortgages in the US, at a low interest rate. (at least lower then what private institutions would be willing to offer. If Freddi and Frannie no longer were backing new mortgages, the housing market would take another large drop in demand. Such a drop in demand would lead to another drop in housing prices, and of course more strategic defaults and foreclosures
    It doesn't look like I'm getting an answer from Pete, so I'll ask you:

    First, why would you assume that the US government's refusal to provide this $10.6B would cause Freddie to go bankrupt?

    Second, why would you assume that an eventual bankruptcy would cause these mortgages to be "called in"?

    Third, why would you assume that said mortgages being "called in" would result in 60+% of people being kicked out of their homes?

    If the refusal to provide this $10.6b would really have such massive, trillion-dollar effects, one would assume that there wouldn't need to be debate over this. Even if the government refused, it would be likely that the market would step in to provide the needed money. Given that this doesn't seem to be the case, I think any doomsday claims about what would happen if this money weren't provided are a bit absurd.
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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by jujuman13 View Post
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    BBC News - Freddie Mac seeks further $10.6bn in US aid

    Quote(US mortgage giant Freddie Mac saw a loss of $8bn (5.3bn) in the first three months of 2010 and said it would ask for a further $10.6bn in state aid.)

    In my opinion it would be an Obamanation to continue dripping cash into either of these organizations.
    And with Fannie Mae asking for 8.4 Billion more, it pretty much closes the deal. We've got to force the US Government away from these two irresponsible GSEs.
    There is nothing more dangerous to the liberty of Man than a Government or a Religion seizing upon the strings of an overdeveloped herd instinct amongst the people.

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    Re: Freddie Mac seeks further $10.6bn in US aid

    Quote Originally Posted by Phantom View Post
    I agree, lack of regulation caused the problem but what I don't agree with is your solution to the problem. We can't keep throwing money in the hole and pretend things will get better. This bailout will go straight in the corporate elite's pocket, not to the middle class. They will do what they always do... Take the money and run.
    Solution? Not saying it is a solution. I am saying there is no choice. If you let Fannie and Freddie go belly up, the only ones who will be making a ton of money out of it, is the private sector corporate elite. They will be able to buy up 55% of the market for next to nothing and then slowly force people out of their homes. Having Fannie and Freddie go belly up will only hurt the average American.
    PeteEU

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    Re: Freddie Mac seeks further $10.6bn in US aid

    Before I went to college in the mid-nineties, I was in residential construction. I used to live out of a suitcase, moving from one boom town to the next.

    While doing a 4 year stint in the Bay Area of CA, I noticed a strange phenomenon. After we finished the 'model homes' in a new sub-division, the sales office would open to a long line of investors that would come in and buy homes that weren't even built yet. Apparently, these homes would be sold 4 or 5 times on paper before the first family actually moved in.

    This side of the housing bubble never seems to get mentioned. The fact that the price of the homes increased with each sale definately contributed to the over pricing of homes, far beyond their reasonable value.

    So the bubble pops and you find out that you are way under water on your mortgage payments vs. the value of your home. 60 minutes ran a segment last Sunday where they interviewed home buyers that were simply walking away from their houses that weren't worth anywhere near what they were paying. It was mentioned that two thirds of home buyers are actually in this same situation.

    If everyone in this situation decided to bail on their mortages, you'd see a lot more than F&F going down the tubes. The vaccuum would take the country along with it.
    Last edited by d0gbreath; 05-12-10 at 10:05 AM.
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