Gladiator

Fannie and Freddie are now under Fed Cpontrol, and tey are still forecoling aginst working families, who, with re-structuring, could afford to prevent bigger losses in foreclosure. Paulson refuses to re-structure mortgages to prevent unnecessary foreclosures.


the spitting vessel: Fannie, Freddie, Foreclosures, and the Federal Funds

9-12-08

"Four members of Washington’s powerful Senate Banking Committee have demanded that America’s newly state-owned mortgage companies freeze all foreclosure proceedings for the next three months as part of an attempt to stem losses in the US real estate market.

In a letter to Fannie Mae and Freddie Mac, which between them finance half of America's mortgages, Charles Schumer, of New York, Robert Menendez, of New Jersey, Sherrod Brown, of Ohio, and Robert Casey, of Pennsylvania have requested that the two companies halt all pending foreclosure proceedings on mortgages they hold for at least 90 days. They have argued that the freeze could help both home-owners and the companies. Such a request has been given added weight because Washington took control of Fannie Mae and Freddie Mac at the weekend."


Fannie and Freddie asked to halt foreclosure proceeding - Times Online


Battered homeowners, lenders turn to 'workouts.' (home loan restructuring) (Special Report: Quarterly Real Estate) | Article from Los Angeles Business Journal | HighBeam Research


Four Fannie Mae execs out in restructuring - Mortgage Mess - MSNBC.com


What is Paul Volker's alternative to the Bailout?

Volker on Financial Crisis


Former Fed chief Volcker questions wisdom of Bear bailout, cuts - MarketWatch


"Consider, for example, what Paul Volker said three years ago, in April of 2005:


Yet, under the placid surface, there are disturbing trends: huge imbalances, disequilibria, risks -- call them what you will. Altogether the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot. What really concerns me is that there seems to be so little willingness or capacity to do much about it....A vulnerable financial/banking system. We live in a global laissez faire financial system that is highly leveraged with debt financing, derivatives and fractional reserve banking. Hedge funds are not really “hedged,” but highly speculative, and another collapse along the lines of Long Term Capital Management could be disastrous."

Angry Bear: The Bailout Plan: Oops, Get Out the Big Checkbook















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How did Our Oil get under Their Sand?

Gladiator

9-5-08 Volker Comments:

"The former Fed chief projected "a lot'' more losses from the collapse in the mortgage-backed debt market, after the more than $500 billion tallied so far, should the U.S., European and Japanese economies fail to pick up. He urged changes in financial regulations, echoing calls among sitting officials and legislators...

Volcker's comments came after a government report today showed the U.S. unemployment rate rose to a five-year high as the economy lost more jobs than forecast in August. The report underscored concerns that U.S. consumer spending will weaken and push the American economy into a recession."

The Big Picture | Paul Volcker: Finance System is 'Broken'


"Another idea is the creation of federal insurance for investors in money-market funds, which are supposed to be ultra-safe investments. But investors have been pulling out their money along with the general panic, so the government is considering guarantees for these funds similar to those that safeguard bank deposits. The move is designed to stem the outflow of funds from even these safest of investments, and to stop financial contagion from spreading to the rest of the banking system. Americans hold about $3.4tn (£1.87tn) in money-market funds.

So will we see another Resolution Trust Corporation?

It's still unclear what this entity - dubbed "bad bank" - will do exactly. The RTC took over failing S&Ls in their entirety. This time round, the new body might just purchase assets at a greatly reduced value and sell them back to the market. One issue will be how the government will value the assets it takes over. One possible option could be to sell them through auction, so that the government would not have to get involved in negotiating asset prices. US treasury department officials have reportedly studied a structure to buy up distressed assets for weeks, but are unsure whether it would win congressional approval."


Banking crisis: US rescue plan Q&A | Business | guardian.co.uk





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