Replies to post #319081 on Fannie Mae-No Politics (FNMA)

[lookaheadfuture]

Conservatorship is to preserve and conserve the assets of the companies and to "nurse them back to financial health". Conservatorship is not a new thing. Its not to return their assets to some third party who loaned money. It's always for the owners and even the US Treasury will tell you that the Shareholders are still the owners.

[brandemarcus]

1. Hera's language was supposed to be actually the same as the regulations on conservatorship for the fdic. That is why it is very interesting that a former head of the fdic -William Isaac is associated with one of the amicus briefs. He think judge Lambreth's decision sets a dangerous precedent for any future terms of a private rescue of any financial institution. Who will trust this government and be part of some other future transaction if they can get away with this sweep? Senator Toomay has expressed similar sentiments.

2. Yank in another post you asked about the gse's" huge" losses in 2007.
The magnitude of those losses was not very "huge" in comparison to after 9/2008-2009. Nothing compared to the 187.5 billion run up when the government was in charge. I will check on the exact details and have no problem comparing. This whole thing has been covered by John Hempton for 2008, 2009. Fannie even had comments in the 10k's (2010)that the loss provisions from 2009 may have been overstated and the mark to market losses
from 2008 were also overstated.

[cfljmljfl]

So the HERA LAW put FnF in Conservatorship to save housing and the economy, Not because FNF were insolvent? That is consistent with what Paulson said as he stated to shareholders and media. The Billions of dollars in bad mortgages removed from TBTF banks to FnF balance sheets was an act by the government on behave of saving the housing and economy ? Fact is had nothing to do with saving FnF because FnF were not insolvent. Fact is treasury wanted to control FnF so he could distribute funds to which TBTF banks and how much and path of distribution like AIG TO GOLDMAN SACHS.

Obama's issue is reform. What act is he trying to reform? He wants a law to guarantee banks are forced to issue subprime and unqualified loans, and housing rental guarantees. He is using the sweep as leverage against congress to get them to move on making laws to force bank industry to that policy. Right now banks don't have to and every thing he does now under executive privilege will be ripped out by next president.

Why the reform law is important? Go back to Bill Clinton. In 1995, The ghettos in Chicago, LA etc. Crime ridden with killings, drug traffic...etc. Those communities were organizing to challenge democrats to provide alternative to current life. The EPA regulation would not allow the building of new communities solely for the movement of these people away from the criminal elements. Political solution became Section 8 and attack the banks to force subprime etc.. This was done on racial discrimination charges and policy.

People are not stupid. Communities which these people were being transfer took notice and caused white flight from those communities to newer communities. What happen to chicago ghettos Cabrini Green and Taylor project. Remember that Olympic bid Obama failed to win. Will that failure was big cause illions of dollars was spent to tear down the ghettos in Chicago and replace with Olympic Village. On top of that you have gang bangers spread into out layers of Chicago and through out the state of Illinois.

That is your housing boom. Currently the housing is refinancing for lower rates and it is about over. Most boomers are staying put. The younger generations don't generate enough income to buy or rent. There are tons of people living in shelters. In fact some shelters have shift occupants per bed.