DISQUS

Blown Mortgage: If you wondered who the Fannie bail out was for, wonder no longer…

  • Money Man · 1 year ago
    Our money has been going over there to fund their industrial expansion by the purchasing of their goods produced. It is only fitting they support our crazy consumer system by giving us back some of the cash in the mortgage market so lenders can in turn allow consumers to continue ths idiotic cycle that passes for business profitability and successful globalization. Just another ponzi scheme feeding another ponzi scheme in the name of greed.
  • Ken · 1 year ago
    Great, what to expect besides xenophobic fear mongering. So because China has 300B out of a few Trillions, the US Treasury's action is because of China ? Just think about your own logic, folks. Folks, you have a bad problem, don't make it worse by blaming foreigners. Like the saying goes, all Empires fail due to their own fault, foreigners are just on-lookers.
  • morganb · 1 year ago
    Ken,

    No one's blaming foreigners here. It's clearly our fault. But fault
    is not tied to the action here. Foreign investors were nervous about
    their investments. And those investors happen to come from our
    country's largest trading partner, China. It's naive to think that
    their interests were not considered or served in any of this. In
    addition to the 300 billion mentioned in the article China holds
    trillions in other US assets, cash, mortgage debt etc. It wasn't
    about the 300 billion.
  • Fielding Mellish · 1 year ago
    Edzackly! While I wish the foreigners (and domestic buyers of GSE debt) would have had to take the "haircut" prescribed by Nouriel Roubini, I must admit that Paulson may have calculated that our guaranteeing GSE debt (ultimately to the probable tune of $300 bil or so) may be less expensive than having to pay higher ongoing rates in order to float the entire federal debt. Bondholders taking a haircut on GSE debt may have imputed a igher risk of a US default on Treasury debt. Who knows whether such a calculation is accurate. It's not entirely illogical, though. And it demonstrates our unhealty reliance upon our creditors. "Neither a borrower nor a lender be."
  • Giana · 1 year ago
    Can you say Amero?
  • Brian · 1 year ago
    China Holds 800 billion not 300 billion. European investors hold 300b.
  • ELNumeroJuan · 1 year ago
    Morgan,
    I really enjoyed this post and I am learning so much from the conversation as well.

    I think that a bailout was inevitable because of the effect it would have on the housing market. Without these programs it would be much harder to get homes sold.
  • Jeff · 1 year ago
    The problem here is all the losers who defaulted on there home loans!!! Banks are also at fault for giving these losers mortgages with " little or no money down". Homeowners should not be getting mortgages without putting down at least 15 to 20 percent down on the value of the property. That is, a house valued at 100,000 dollars, a person must put as a dow payment 15.000 to 20.000 dollars!!! That should be made a law!!!