digg

Join DiggAbout

Discover and share the best of the web!
Learn more about Digg by taking the tour.

See the original image at nytimes.com

U.S. Considers Takeover of Two Mortgage Giants

nytimes.com — Under the plan, shares of Fannie Mae and Freddie Mac would be worth little or nothing, and any losses on mortgages they own or guarantee would be paid by taxpayers.

Bury
show profanity settings
expand all
  • Fangsinmybeard, on 07/11/2008, -3/+89There goes the economy.
    • sjl127, on 07/11/2008, -6/+23There goes the United States. If this doesn't cause revolt, I don't know what will...
      • geometry, on 07/11/2008, -2/+37Probably taking American Idol off TV.
      • Pissoff, on 07/11/2008, -2/+10As sad as it is I agree with @geometry, and yes I'm doing nothing too.
      • sanman, on 07/11/2008, -0/+7Cry, the beloved country

        Fannie and Freddie have so thoroughly ***** around, that they have no reputation left to save.

        Bah, you might as well rename them Bonnie and Clyde.

        Can you say PYRAMID SCHEME, boys n girls?
        Aren't pyramid schemes supposed to be ILLEGAL in the United States? Apparently not, as long as they put the word 'Federal' in their name!!
      • sjl127, on 07/12/2008, -0/+3Most democracies only lasted about 200 years... We're due. Yes, I know we're a republic, though.
    • bjornski, on 07/11/2008, -2/+11The transfer of the economy to a private bank is almost complete.
    • alexkreuz, on 07/11/2008, -4/+7"There goes the economy."

      GOOD!

      Recessions are required to bring a sense of equilibrium to society. Unless you're happy with the way people are racing in their hummers to get the KFCs in time to see American Idol on TV in their McMansions. Don't people get that its this avoidance of recessions that's been responsible for all this bloat?
      • sanman, on 07/11/2008, -1/+5Heh, this won't be a recession -- it'll be a plunge into The Abyss.

        I don't know how you expect a recovery from this.

        It's like jumping off a skyscraper, and then hoping to bounce when you hit the ground.

        When the kinetic energy of your fall exceeds the structural strength of your body, then expect to hear a big SPLAT sound.
      • alaskanassassin, on 07/11/2008, -2/+2what does it matter what the hell i think about what makes other people happy.

        you sound like an envious loser, bitter at the world.
      • raisputin3, on 07/12/2008, -0/+1@sanman
        You probably would bounce depending on how high the skyscraper was...just once though
      • sanman, on 07/12/2008, -0/+2@raisputin3

        yeah, well when this next Great Depression hits us, we'll have plenty of opportunity to watch those plunging bodies, to see how they hit the ground
      • alexkreuz, on 07/13/2008, -0/+1@sanman

        Without the great depression we couldn't have had the roaring 50s. There are always recoveries. What goes up must come down. What goes down comes back up.

        It wouldn't be a plunge into the abyss if for the last 30 years they hadn't been trying to prevent recessions. With each prevention, we race higher, making the inevitable drop even steeper. And each time people's behaviors become riskier.

        And why shouldn't they take on more risk when they have a government guarantee at a bailout?

        @alaskanassassin

        Yes I am bitter about wealth distribution. I pay off all my debts on time and behave responsibly so that I have the capital to bail out McMansions and Hummers. I suppose you don't understand the concept of theft but that's ok.
    • lewhich, on 07/11/2008, -2/+6If Bush was to stay in power for 30 years like Mugabe I bet you the US will be a worthless 3rd world country.
    • theOster, on 07/11/2008, -0/+5thread hijack, but for those that are new to this thing - heres a quick break down:
      http://www.nytimes.com/2008/07/12/business/12q-a.h ...
    • theOster, on 07/11/2008, -1/+10and also, for all those that keep saying ron paul is a nutjob...
      (from january)
      http://optionarmageddon.blogspot.com/2008/01/balti ...

      "Another Paul prediction, that Fannie and Freddie will go bust, forcing a taxpayer bailout, remains controversial because few think the housing crash could be that bad."

      guess what? it's that bad.
  • zebov, on 07/11/2008, -3/+135"The Bush administration is also considering offering an explicit government guarantee on the $5 trillion debt owned or guaranteed by the companies, the Times said. Such an option... would double the public debt."

    Wow. Just... wow.
    • kaplanfx, on 07/11/2008, -0/+31Well it's official I'm no longer going to be responsible with my money. May as well ***** things up and let the gov't bail me out, as my taxes are paying for the bailout anyway. Way to encourage responsibility of the citizens.
      • bullhead2007, on 07/12/2008, -0/+3I get what you're saying, but they won't bail you out unless you're a billionaire or part of club Fed (as in The Fed, as in The Federal Reserve).
    • Jareth86, on 07/11/2008, -0/+10I believe the term is, "compassionate conservatism"?
    • CPMan, on 07/12/2008, -0/+6But aren't the federal government's powers limited by the... the Constella... no, the Constipa... the um... the whatchamacallit... What's that thing, again?
  • zebov, on 07/11/2008, -28/+10"The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. ...it would effectively double the size of the public debt."

    Wow. Just... wow.
    • zebov, on 07/11/2008, -0/+10er.. the first one didn't go through I thought... bury this one down
      • Polarize, on 07/11/2008, -2/+11Thank goodness there is now a delete button!

        As a side note, America is screwed.

        The Democrats are just as bad, if not worse.

        The Republic is dead.
  • goodnrg, on 07/11/2008, -2/+52"The officials involved in the discussions stressed that no action by the administration was imminent, and that Fannie and Freddie are not considered to be in a crisis situation." On the Thursday before the Bear Stearns buyout, everything was supposed to be OK too. Come Sunday, the deal was done. Unfortunately, this would make the Bear Stearns rescue look like pocket change.
    • desertDenizen, on 07/12/2008, -0/+3Cramer's take: "Blame the Mortgage Insurers"

      "The blowhards and bluff artists and the Gang of Four -- Ambac, MBIA, MGIC, and PMI -- truly have blood on their hands for this moment. So do the ratings agencies, the mortgage insurers and the salespeople who packaged undocumented loans and pushed buying homes with no money down.

      "The big problems that everyone has from Fannie Mae to Freddie Mac... frankly, aren't the defaults. The default rate for FNM mortgages is amazingly low, around 1%."

      http://www.thestreet.com/s/cramer-blame-the-mortga ...
  • dunderballer, on 07/11/2008, -6/+42Part of the responsibility for this nonsense lies with the voters and their desire to have politicians "fix" the economy. The unfortunate fact is that American consumers have overspent on mortgages, the government has overspent and overborrowed for war, and investors have supported reckless management of the companies they invest in. We are going to pay to the price for these mistakes one way or another. These quick fix attempts are only going to make the fall harder. Politicians should be discussing ways that the US could be more competitive in the global economy that we are loosing ground in.
    • yellowcakewalk, on 07/11/2008, -2/+17We have had our government boarded, hijacked, raped, and pillaged by pirates. They must be brought to justice.
    • kaplanfx, on 07/11/2008, -2/+9Agreed, we must let the free market return itself to equilibrium. It's like no one understands basic economics anymore.
      • Stochio, on 07/12/2008, -0/+1Or, more aptly, *towards* equilibrium in the least.
    • andy314159pi, on 07/11/2008, -3/+2There is a spectrum here... on one end is a completely free market and on the other end is a totally managed economy. Our economy is, compared to other industrial economies, about as far towards the free market end as you can get. Strangely enough, right now heavily managed economies are outperforming free economies like ours. China has a heavily managed economy; deft management, along with a pegged currency, has led them to 8 or 9 % growth.
      • xceptionaly, on 07/12/2008, -1/+2Yes, but that's different. As a frustrated college student, I know first-hand how good the Chinese are at math. They're indestructible robots from the future. Of course they have good economic growth.
      • Metasquares, on 07/12/2008, -1/+2I think the "deft management" part is key. How can we call what intervention the government has recently made "deft"?
    • mithrasinvictus, on 07/11/2008, -4/+3If the government had properly regulated the market, it wouldn't need "fixing" now.
      • DRINKxREDxBULL, on 07/11/2008, -3/+5Government "fixing" the problem through regulating is exactly what got us into this.
    • ChayD, on 07/11/2008, -0/+1Theis is really robbing Peter to pay Paul. Its happening over here too, what with Northern Rock and Bradford & Bingley, no doubt there will be others clamouring for public bailouts while their shares plummet.
    • bullhead2007, on 07/12/2008, -0/+1It's easy to blame the voters until you realize that your vote doesn't count for anything. "Choice" A and "Choice" B are bought and paid for before you get to the voting booth. You have no choice. As George Carlin put it, voting is a waste of time.
  • yellowcakewalk, on 07/11/2008, -5/+101Market Marxism = privatize the assets and profits, socialize the losses and risks.
    • known, on 07/11/2008, -12/+14Socialism = Preventing Race to the Bottom
      Capitalism = Promoting Race to the Top
      We need both (either implicitly or indirectly) for a nation to succeed!
      • rxbudian, on 07/11/2008, -2/+41. it weakens the stronger to protect the weakest that is supposed to naturally be replaced
        2. it also sometimes spreads the cost of the mistakes the strongest made that affect the weakest.

        Not that I'm against Socialism and Capitalism, but I'm all about accountability.
        If the strongest is accountable for the weaker to become the weakest, then it has to keep the weakest from dying.
        If the weakest is accountable for it's own predicament, then it should not expect the stronger to keep it alive.
      • pintomp3, on 07/11/2008, -7/+5absolute socialism and absolute capitalization only work in theory, as proven by the soviet union and chile under pinochet. keynesian and developmentalism are the only two proven systems.
      • NonLeftistDiggr, on 07/11/2008, -9/+6should also say
        socialism = preventing race to the bottom and any chance of competing in a race to the top.
      • mecharabbit, on 07/11/2008, -0/+10It really is in the interest of the stronger to support the weaker in a capitalist system. The weakest members of society are still consumers and possibly workers. The stronger can't make money without both of those.
    • Infidelcastr0, on 07/11/2008, -0/+2Exactly.
    • alexkreuz, on 07/11/2008, -0/+5And they wonder why the rich get richer and the poor get poorer. I wish I had access to the fed window. I'd borrow a bajillion dollars at -10000% interest and invest in bubbles and get 100000% interest.

      Best case scenario: I = rich.
      Worst case scenario: I = bailed out. (Oh yea and tax payers get shafted but who cares about that).

      Its a win win situation (for me).
    • LenBaird, on 07/12/2008, -0/+31. Banks create huge problems for the public economy, by creating way too much money
      2. Banks make HUGE profits by operating in this manner, for their own benefit and to the destruction of the economy
      3. The government bails out these bankers when it inevitably comes crashing down
      4. The public, who has been robbed by the system from the get go, finances the bailout
      I think I know why people refuse to accept the fact that our banking system operates in a manner that would normally be considered criminal. If they actually allowed themselves to realize it, they would become homicidal.
  • rzxc, on 07/11/2008, -4/+17There is no such thing as an implicit guarantee. In fact, the expression "implicit guarantee" is inherently an oxymoron. The only type of guarantee is an explicit guarantee. The reason they don't call it an "explicit guarantee" is because the word "explicit" is redundant. Since there is no explicit guarantee for Freddie Mac and Fannie Mae, our government does not need to bail out Fannie Mae and Freddie Mac. It can let investors take the losses and still keep Fannie Mae and Freddie Mac operational. Here's what they need to do. They can take over those two institutions and decree that all securities issued from now on have a government guarantee. The securities issued before never had a government guarantee and would still not have a government guarantee. That would prevent the public from having to pay for a huge bailout while still keeping those institutions up and running. Also, the government needs to make sure that all Fannie Mae and Freddie Mac loans have a substantial down payment, say 20 percent. The housing market will continue to deteriorate. If the loans do not have a substantial down payment, those loans will probably not be repaid. By taking those two steps, the government can prevent taxpayers from absorbing huge losses.
    • ChuckieBallz, on 07/11/2008, -3/+0rzxc for president!
    • mciampa1214, on 07/11/2008, -0/+4The entire reason Fannie and Freddie were created was to promote home ownership in the lower and middle class, at least make it more accessible. Show me a lower to middle class worker that has enough saved up to put a 20% down payment on a house, and I'll show you a person that probably didn't go through these institutions in the first place.

      Also, while the 'implicit guarantee' doesn't technically make sense, it does in the sense that everyone knows (many people believe anyway) that the government won't allow them to fail, even though there is no 'explicit guarantee'.
    • zebov, on 07/11/2008, -0/+2Actually, there is such thing as an implicit guarantee. Maybe semantically it "doesn't make sense," but over here in reality world it does exist. Here is what it means (whatever you decide to label it):
      - 2 government chartered companies own half of all the mortgages in the U.S. and are given billions of dollars in benefits every year from the government.
      - If these 2 companies go kaput, the entire economy is destroyed
      - If the Federal government allowed this to happen, all the politicians would lose their jobs
      - Thus, there is an extremely good chance that the Government will bail out all the bond holders if the companies go bankrupt.

      There, if you don't want to call it "implicit guarantee" then fine. But the general concept is legit.
  • SteelChicken, on 07/11/2008, -2/+71let them go out of business. maybe next time they wont authorize so many brain dead loans.
    Since when is it the governments job to save stupid businesses from themselves?
    • form3hide, on 07/11/2008, -15/+3when it's going to affect millions of americans?
      • bjornski, on 07/11/2008, -0/+3It's not now?
      • form3hide, on 07/12/2008, -0/+1It certainly is, right now. But what do you think is going to hit us Americans worse? Fannie/Freddie folding or the government helping these companies out?
    • mciampa1214, on 07/11/2008, -1/+11Actually Congress created these institutions to make home ownership more accessible to the lower and middle class. When created, they were allowed to have different regulatory procedures (in terms of capital reserves etc.) which allowed them to provide that service.
      • onlyclave, on 07/11/2008, -2/+9Ah, so even people that can't afford it are entitled to buy a house?
      • TRScheel, on 07/11/2008, -0/+3@onlyclave

        Exactly... sadly...
    • DRINKxREDxBULL, on 07/11/2008, -1/+4When they give Senators like Obama and Dodd sweetheart loans, and then they write the terms for their bailouts, that's when.
  • ponyboy96, on 07/11/2008, -6/+48WOW!!!! This is going to collapse the economy if they do this. Hyper-inflation anyone?
    • RationalXubrnce, on 07/11/2008, -2/+9 Explain why you think that could happen.
      • holzp, on 07/11/2008, -3/+2This is digg, you have to explain why it *won't*.
      • zeusthemoose, on 07/11/2008, -0/+7Where is the government going to get the 5 trillion from?
      • P1nkF70yd, on 07/11/2008, -0/+3Doubling the size of the national debt?
      • Temo1, on 07/11/2008, -1/+45 trillion dollars isn't the actual amount the government would have to pay out. It's the accounting charge that would go on the government debt. Kind like Social security and medicare/caid accounting charges (for "promises") which account for 4 trillon or so of the 9 trillion government debt.
    • e1ioan, on 07/11/2008, -0/+3some kind of Hyper-inflation will help me to pay off my house! woohoo! probably I'll pay the mortgage off with one salary ;)
      • WhoWatches, on 07/12/2008, -0/+1Your assuming your company which is failing due to the crashing economy bothers to give you that COLA. ::thumbs up::
  • StingingNettle, on 07/11/2008, -1/+35Thank God one of these articles is making it to the front. I was surprised nothing did yesterday. Fannie Mae's 52 week high is $70 now its around $8. The government will have to bail out these two companies, so we are all going to be home owners now! Where will the money come from? New 1's & 0's will be created by the Fed (as you can see gold & silver is loving that). Foreclosure rates are increasing (report from yesterday). This isn't going to be your normal recession I'm sorry to say.
    • andy314159pi, on 07/11/2008, -0/+8oh I thought it was all in our heads
      • zeusthemoose, on 07/11/2008, -0/+4Mental Recession FTW!
      • Vocifer, on 07/12/2008, -1/+2Stop whining.
      • bullhead2007, on 07/12/2008, -0/+2^Vocifer made a slam against McCain, you should be digging him up!
    • Temo1, on 07/11/2008, -3/+2The fed isn't going to finance a government take over of either institution. If you don't see why that is impossible, you need to be more informed.
    • BESTenemy, on 07/11/2008, -1/+7Unfortunately they were practically government organizations to begin with. They were the 2 subsidized mortgage brokers that were designed to make housing more affordable, but as it always happens, whenever government interferes with the mechanism of the free market, it breeds appetite for subsidies and worsens the situation. Establishment of Fannie and Freddie had lead to increase in housing prices making housing less affordable overall.

      There is no one big enough to absorb these dinosaurs. The government cannot bail them out as they were already on government payroll. Their failure is the litmus test for government solvency. When they go, everything else goes. First, the big investment banks, then small investment banks and big commercial banks, coupled with bankruptcies of industrial giants like GM and Ford... airlines will be going out of business as well, so if you weren't able to get out of the country before the collapse, you'll have much fewer options left.

      There is no reason for optimism whatsoever. We are bankrupt. All that's left is to read the memo out loud. Since the beginning of Sub-prime, nothing has changed. Nothing!
  • prleet, on 07/11/2008, -5/+21I hope all those companies burn in hell, and F*** no, I am not authorizing my hard earned money(taxes) to go to these bloodsuckers to be bailed out..
    • Skooma714, on 07/11/2008, -1/+14lol you really think it's up to you?

      Stop paying taxes, that's the only way.
      • OldJesser, on 07/11/2008, -2/+4I did. Claimed max exemptions (still forced to pay SS and medicare). Then again, I'm moving to Australia in less than a month, so I didn't really see the point in paying US taxes this year.
      • Skooma714, on 07/11/2008, -1/+4Like the spirit but you still paid them.

        By the way you don't have to pay SS. I've never heard of anyone going to jail for not paying SS, could be wrong though.
      • bjornski, on 07/11/2008, -3/+3You CAN opt out of SS.

        But when your "great investments" fail, don't expect to get any help.
      • alexkreuz, on 07/11/2008, -0/+2If you're W2 you have to pay SS because its already pre-deducted. Is there a way to opt out of it? An IRS form maybe?
      • bjornski, on 07/11/2008, -1/+2Ah, a little more restrictions than I had thought, but here's a page someone put together about it.

        http://arbyte.us/blog_archive/2005/07/Opt_Out_Real ...

        Looks like you're screwed.
      • DRINKxREDxBULL, on 07/11/2008, -1/+2Considering how it will be guaranteed to pay more to SS then I could ever hope to receive, I think I would rather take my chance in the private market.

        Oh wait, that's right, Obama, our next President, is against that kind free-choice.
  • onyxrev, on 07/11/2008, -1/+17How could they even consider this as an option? If you or I created a business that was on the verge of going bankrupt you know there would be no reason for the government to buy us out. Look at Amtrak for another shining example of a Federal buyout. Jesus Christ.
  • BBWolf, on 07/11/2008, -1/+16There goes the neighborhood....
  • Kinsbane, on 07/11/2008, -4/+29America. ***** yeah.
    • Pissoff, on 07/11/2008, -0/+14Coming again, to save your mother ***** company yeah,
    • eastwood24, on 07/11/2008, -1/+5McDonalds, ***** YEAH!
      Wal-Mart, ***** YEAH!
      The Gap, ***** YEAH!
      Baseball, ***** YEAH!
      NFL, *****, YEAH!
      Rock and roll, ***** YEAH!
      The Internet, ***** YEAH!
      Slavery, ***** YEAH!

      ***** YEAH!

      Starbucks, ***** YEAH!
      Disney world, ***** YEAH!
      Porno, ***** YEAH!
      Valium, ***** YEAH!
      Reeboks, ***** YEAH!
      Fake *****, ***** YEAH!
      Sushi, ***** YEAH!
      Taco Bell, ***** YEAH!
      Rodeos, ***** YEAH!
      Bed bath and beyond (***** yeah, ***** yeah)

      Liberty, ***** YEAH!
      White Slips, ***** YEAH!
      The Alamo, ***** YEAH!
      Band-aids, ***** YEAH!
      Las Vegas, ***** YEAH!
      Christmas, ***** YEAH!
      Immigrants, ***** YEAH!
      Popeye, ***** YEAH!
      Democrats, ***** YEAH!
      Republicans (republicans)
      (***** yeah, ***** yeah)
      Sportsmanship
      Books
  • forgottenhope, on 07/11/2008, -6/+12dissolve the ***** government by force.
    • ozymandias2012, on 07/11/2008, -1/+18"That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness"
      • kaplanfx, on 07/11/2008, -0/+8I bet it takes most people a while to figure out where that text came from, sad fact is the current administration and most of the public just consider the constitution a nuisance. (and yes I realize your quote was from the declaration of independence but I had to make my point)
    • gcnaddict, on 07/12/2008, -0/+3can't say that 'round these parts. The NSA just recently got reauthorized to scan your words, remember?
  • vonmises05, on 07/11/2008, -5/+14Great scholars like von Mises, Hayek and Murray Rothbard were laughed to scorn by Keynesian scholars back in the day. Today, we are living in the "long-run", of Keynes and neo-Keynesian philosophy. The market must be free and interventionist policies create fiscal irresponsibility. The US economy could have learned from previous failures of inflationary and interventionist macro-planning. Hopefully we will before things get too dicey...
    • skinnyskittles, on 07/11/2008, -0/+5glad to see another austrian economist on here. if anyone reading this isn't familiar with mises, hayek or rothbard, familiarize yourself: www.mises.org
    • RationalXubrnce, on 07/11/2008, -0/+4 What were their thoughts on a centralized private bank and debt based fiat currency?
    • Vocifer, on 07/12/2008, -0/+4I nominate vonmises05 for FED chairman, right before he abolishes it.
    • vonmises05, on 07/14/2008, -0/+1Thanks! It's nice to hear some feedback from like-minded students of economics. It's a lot better than the usual I get (you are a retard and don't no what yer talking about. The government giving money to everyone is great and I like more money (but don't tax me for it. Tax those greedy oil guys....)lol!
  • kessel, on 07/11/2008, -7/+1http://youtube.com/watch?v=uyp-TnPZmhU
  • InvisibleInk, on 07/11/2008, -1/+33No more bail outs. No exceptions.
    • ivanmarsh, on 07/11/2008, -1/+5No kidding...

      When do I get my free house?
      • mciampa1214, on 07/11/2008, -0/+3What?! No one is getting free houses, what the hell are you talking about?
    • savagesteve13, on 07/11/2008, -0/+6Lets hope we don't have to bail out General Motors. Why should the taxpayer bail out a failing car company because it refuses to make subcompacts?
  • vrich187, on 07/11/2008, -2/+17"***** thing sucks!"
    • justice7, on 07/11/2008, -3/+1"***** SALT!"
    • kaplanfx, on 07/11/2008, -2/+2-- Bill O'Riley?
    • zeusthemoose, on 07/11/2008, -2/+4"Well do it Live!"
      • gcnaddict, on 07/12/2008, -1/+2You know, I was about to digg you up until I realized that you ignored one vital punctuation mark.

        I was about to ignore this oversight until I realized you included the rest of the punctuation marks.

        In other words, you just failed at English. Thankfully, there is a shortage of grammar nazis.

    • mbonnin, on 07/11/2008, -2/+1We're still doing this meme?
  • drmangrum, on 07/11/2008, -1/+16As much as I dislike all the conspiracy theories surrounding the proposed Amero, it's starting to look less and less tinfoil hat wearerish. The first step to making a new currency favorable is completely trashing the old currency. May want to watch this like a hawk and shift finances to gold, silver, and oil commodities.
    • GnralHavoc, on 07/11/2008, -0/+6Everyone is already switching to oil commodities. Did you not see the record high today of 147 a barrel. We are heading into bad times when winter comes around with the price of heating oil.
      • bnolsen, on 07/11/2008, -5/+4Sucks when the US is possibly the most oil resource rich country in the world and the majority of politicians (elected, mind you) are doing everything possible to absolutely not allow any of it to be accessed.

        In my state the governor, one senator and one congressman running for senate have all done everything they can to block oil shale harvesting and even stop existing oil pumping. It's all just total insanity.
      • bjornski, on 07/11/2008, -1/+5The oil companies already have millions of acres of leases.

        Nobody is stopping them from drilling in them besides themselves.

        They don't need more until they utilize what they have.

        They have MILLIONS of acres they're already sitting on for ***** sake. The only people responsible for not utilizing our existing supplies are the holders of those leases.
    • sodade, on 07/11/2008, -0/+3I think I'll put my money in a stable currency instead. Norwegian Kroner is looking pretty good about now...
    • YoshinoAiki, on 07/11/2008, -0/+2I think plenty of people have already been shifting finances to gold, silver, and oil commodities.
  • BlvdKing, on 07/11/2008, -7/+25We need to raise taxes, cut spending, and end the War on Drugs and War on Terror.
    • 0xbaadf00d, on 07/11/2008, -7/+10Umm if we cut all those things, we would have to lower taxes, not raise them.
      • skinnyskittles, on 07/11/2008, -5/+6i agree. there's never a reason to raise taxes. plenty of places to cut spending.
      • zeusthemoose, on 07/11/2008, -3/+4Um...

        http://www.brillig.com/debt_clock/

        and now the whole issue of picking up 5 trillion in debt...

        Plus Iraq.

        Sorry, but you will need to raise taxes through the roof (only on the rich thankfully because its their greed that got us into this mess in the first place!)
      • CYcolone, on 07/11/2008, -2/+5$5,000,000,000,000 dollars in national debt and the resulting rampant inflation seem like pretty good reasons to me.
      • bjornski, on 07/11/2008, -1/+6Really? And that helps pay off the debt how?

        People keep bitching about the cost of the Iraq war, but NOBODY seems to give a ***** about the $400,000,000,000 in interest we pay in year to these private banks because we REFUSE TO PAY OUR ***** BILLS OFF.

        $9 trillion in debt already. McCain and his team have already admitted that their plans would drive it up over $12 trillion. (lots more interest!). And now another 5 trillion on top of it?

        So, if this goes thru, and McCain and his corrupt financial adviser get their ways, we're looking at over $17 TRILLION in debt. That would bring the interest to nearly $800,000,000,000 per year.

        JUST THE INTEREST!

        Our economy is being crashed, on purpose. I've been saying it for years, and people just laughed. Now it's happening.

        I'm not hearing as much laughing anymore.
      • skinnyskittles, on 07/11/2008, -1/+3if you cut the spending substantially and kept taxes the same it would accomplish the same thing
      • dementia, on 07/11/2008, -4/+1Or just allow inflation to increase, reducing the real value of the debt and making it easier to pay off...
      • bullhead2007, on 07/12/2008, -0/+5To those saying we need to raise taxes to pay off the debt, that is impossible. The US Debt was never meant to be paid off, and it is actually impossible to do so.

        All of the US currency is borrowed by the government or by bankers (credit/loans) from the Federal Reserve banks. Every dollar created has interest attached. So if I have $10, there is a debt somewhere of $10 + ($10 * Int%). The only way to pay off our debt is to not have any money basically.

        Another thing is that in this fiat system banks are allowed to create money/loans/credit several times more than what they have. If they have 1 million in assets/money, they can lend 10 million out.

        This is also not to mention that our Income tax does not actually pay off any debt, it only pays the interest of the debt to the Fed.

        The only way to pay off this "debt" is to abolish the Fed and the IRS.
    • BESTenemy, on 07/11/2008, -1/+3Medicare obligations along are able to destroy the economy, even if all the measures mentioned take place. Remember that 2008 is the year the first baby boomer retires. Every following year the sustainability of healthcare is going to erode. There is no way out, unless the government defaults and cancels all of its obligation. We consume more than we produce. No magic in that. Simple formula that states things can no longer go on. The system needs to be restarted.
  • diggrnumber1, on 07/11/2008, -4/+8this would be big, considering fannie and freddie jointly guarantee half of the this country's 12 trillion in mortgages. unfortunately, the government is left with little choice. if the companies fail, the economy is ruined and we might fall into another great depression. the ripple effects would be enormous. the government doesn't have the money to bail them out completely. what is more likely is that they will place them in a conservatorship, which was made legal by a law passed in 1992.
    • andy314159pi, on 07/11/2008, -1/+2I don't understand why the economy would fail if they went bankrupt.
      • BlvdKing, on 07/11/2008, -0/+5The Federal Government will take over 5 trillion dollars in debt, on top of the 9 trillion we already have. That's more than 50% increase in debt over night. I don't know how that doesn't scare people.
      • andy314159pi, on 07/11/2008, -0/+2I'm not arguing the point (i.e. I am not saying that I have any idea what would happen.) Someone clarify it for me.
      • bjornski, on 07/11/2008, -1/+3@BlvdKing

        Because in Republican economics, debt is good.
      • sanman, on 07/11/2008, -2/+1bjornski, for Tax-and-Spend Democrats, debt is good. That's how you finance the Welfare State.
      • NorthMass, on 07/12/2008, -1/+1Will you people stop this stupid bickering, the Republicans AND the Democrats are responsible for this debt, not one or the other.
    • NonLeftistDiggr, on 07/11/2008, -4/+2I don't doubt it would hurt the economy in the short term, but BS, it won't cause an economic collapse.
    • diggrnumber1, on 07/11/2008, -0/+4this is what Fannie Mae and Freddie Mac do (from fannie mae's website):

      * Mortgage-backed securities. Our credit guaranty business, launched in 1981, helps lenders package mortgages into mortgage-backed securities, and ensures their credit quality. This enhances the marketability of the securities, allowing lenders to sell the mortgages they originate more easily and replenish their funds to lend.


      * Mortgage investments. Our original business since 1938, Fannie Mae's mortgage portfolio business raises capital by selling debt securities to investors across the nation and around the world. We use the funds to purchase mortgage assets from lenders and the open market. This also helps lenders replenish their funds to lend.


      * Multifamily housing investments. Fannie Mae also helps lenders finance the development of apartment buildings and other rental housing, especially affordable rentals.

      Essentially, they provide liquidity to the housing market. since lack of liquidity in the lending market is exactly the problem right now (due to subprime), the failure fannie or freddie certainly wouldn't be good.

      this sort of thing used be a service provided by the government. fannie mae used to be owned by the government, and it was spun-off in 1968 (however, it is still a government sponsored enterprise, much like the postal service).
      • RationalXubrnce, on 07/11/2008, -1/+1 Sounds like they all be in jail since thier main job was to, "ensure the credit quality of mortgage backed securities." They didn't do that, they knew they weren't doing it and they knew what would eventually happen. Anything less then the jailing of financial stripping of the entire board of directors is a betrayal of the American people.
    • bullhead2007, on 07/12/2008, -0/+2Maybe this country needs to go through something like a great depression for people to wake the ***** up, stop watching American Idol, and give a *****.
  • tehjarvis, on 07/11/2008, -1/+38Funny, I couldn't get a home loan, but my ***** tax dollars are going to bail out these ***** companies.
    They didn't want my money when I offered it before, but they're getting it anyways because they ***** up!
    How about letting them drown in their own failure...If there's a demand, someone will take their place, learn from the mistakes of these asshats and do it successfully. These bastards won't learn ***** and will continue to screw people as long as the government is there to pull them out of the water. Let these ***** go bankrupt.

    ***** this *****.
    • RationalXubrnce, on 07/11/2008, -0/+6 I don't think this is an issue of stupidity so much as criminality. The people running these ventures are probably graduates of America's top Universities and probably have IQ's in the 120-150 range. That they didn't see this coming is unlikely. a more likely scenario is they knew it would all go bad and cause a housing bubble to boot and they had guarantees in advance that no one would go to jail and they would get to keep their money and just step aside as it all goes down in flames.
      • bjornski, on 07/11/2008, -1/+6It's the "Enron mentality".

        They're the smartest guys in the room.

        Corrupt as hell, but as long as they make oodles of profit, they don't care.
    • YoshinoAiki, on 07/11/2008, -0/+3Unfortunately if they go bankrupt we pretty much all lose our money anyway. Everyone loses thanks to this fools.
      • bjornski, on 07/11/2008, -0/+7But the bankers all get to keep their golden parachutes and ungodly compensation for running their businesses into the ground, and the economy with it.

        They really don't care. They can move when it all falls apart. I hear Dubai is nice.
    • luongomi, on 07/11/2008, -10/+1Ha ha. You couldn't get a home loan?? The trouble they got into is that they were giving unqualified people home loans with little or nothing down. If you hit their filter of not being qualified, then you're part of the problem!! You think you should own a home when you can't even afford it! Its like they set the bar super low and you're trippin over it and can't get over. And then you want to blame these people for their problems. YOU ARE THE PROBLEM SIR!
      • luongomi, on 07/11/2008, -3/+0Like a penguin with little legs trippin over the pole. He can't jump! He just can't jump!
      • tehjarvis, on 07/11/2008, -0/+7I'm the problem? You don't know anything about the situation, dickface.
        I had close to 10k to put down, but they wouldn't give me a loan because I had next to no credit history. I make more than enough money per month to make a house payment. In fact, the house payment I was going for would've been cheaper than the rent on the apartment I've had for the last 6 months.
        I guess if my credit was horrible and I had no cash, they would've been happy to give me the loan. It probably went to someone who they know wouldn't be able to make the payments and they were able to shorten the loan and jack the interest way up on them. That's what the problem is.
      • luongomi, on 07/11/2008, -3/+0Nah, its because of you the housing market collapsed. You think you can buy whatever and make the payments (cause you made your 6 month gym club payments or whatever). I'd rather be a dickface than a guy without house - just so you know GUY WITHOUT HOUSE. Ha ha ha. Now that's humor for you :)
      • luongomi, on 07/11/2008, -2/+0I'm sorry I couldn't help it. I should really feel bad but what could I do? All I could see was this little penguin jumping and hopping over there trying to get over the pole! Does someone have a gif of this? That would make my day!
      • biffen, on 07/11/2008, -3/+1Why'd you try to get a loan with no credit? That was dumb. What did you think would happen? I wouldn't give you a house loan either.
      • luongomi, on 07/11/2008, -1/+0Okay I admit to being a little insensitive, it sucks that you couldn't buy the home with what you saved up. The point I was making is that there are A LOT of people out there making the wrong decision about when to buy a house and how much they can afford.
      • zombo, on 07/12/2008, -0/+2luongomi you're one stinky *****.
      • ashfish, on 07/15/2008, -0/+1luongomi, let's have a little loan education. There are a number of things that qualify you for a loan based on the financing amount of the loan: a) down payment b) proof of income, and c) credit history. Depending on where you fall in each category you get placed into different programs. Having a down payment at that point in time, especially in the amount that he was talking about, was almost unheard of and disqualified him for the ***** adjustable rate loans that require no down payment. Once you're out of those programs your credit history becomes EXTREMELY important. In this sense, bad credit is better than no credit. He isn't part of the problem, the people who don't couldn't afford to put down a down payment, who didn't realize wtf an adjustable rate mortgage was, and don't know what a balloon rider are part of the problem. But its not even totally on the people who couldn't afford the loans, there's plenty of people like that. What happened was that these people started to skew the ratings and were speculating, to make these ***** loans look good. So people bought them up, and they became more and more valuable. Their portfolios became filled with more and more of these loans, instead of more secure funds which had less of a chance to default. Until it hit the ceiling, people started to default in record numbers, and these investments that had been touted as good investments eventually break the companies. Please, stop talking out of your ass you dolt.
  • rowjimmy, on 07/11/2008, -0/+26ha. free-market capitalism when it is 3rd world resources and cheap labor. interventionist nepotism when our rich buddies asses are on the line. +1 america.
  • krnldmp, on 07/11/2008, -1/+14You'd better let those blood suckers sink. No reason to prop that ***** up with public money. It wont fix anything and it wont even save anything.
  • sockpuppets, on 07/11/2008, -0/+28If this happens I'm finding the nicest house in my neighborhood and moving in. It's technically part mine, right?
    • wildfire, on 07/11/2008, -0/+5Better hurry before MC Hammer takes dibs.
  • pintomp3, on 07/11/2008, -2/+17privatize the profits, socialize the losses. our "leaders" only represent those who can afford to buy them. and you wonder why the wealth gap continues to widen.
    • GnralHavoc, on 07/11/2008, -0/+6It's gonna get worse.

    • bjornski, on 07/11/2008, -0/+3That's why it was called an "ownership society".

      And we're getting owned.
  • jdelsman, on 07/11/2008, -2/+8Yeah, let them go bankrupt. I don't have a loan through them, so I don't care. :P
  • NonLeftistDiggr, on 07/11/2008, -2/+14What the hell has happend to America..... this is ridiculous. There are millions of people who carefully planned out their home purchase who don't get this benefit. And I don't care what happens to the economy without a bailout, because in the long run bailouts are going to damage it more.
    • pintomp3, on 07/11/2008, -0/+5exactly. while there were some house flippers and opportunists who lied to get loans they couldn't afford, there were also many people who were defrauded and had their signatures forged by companies like ameriquest. instead of helping the victims, we are helping the very companies that lobbied for the relaxation of regulations that led to this mess.
    • alexkreuz, on 07/11/2008, -0/+1Gah, I can't believe I walked away from this awesome 1 Bedroom 600 SQ FT for $400,000 deal. I was gonna go 100% on a HELOC too.

      Damn, now I don't get to profit from all these bailouts.
    • Angostura, on 07/11/2008, -4/+1There are millions of people who carefully planned their home purchases and took out a loan they could afford with Fanny or Freddy. If the companies go under, you *do* knows what happens to those people, don't you?

      You really *don't* want the companies to go under.
      • Apophis574, on 07/11/2008, -0/+6Nobody wants companies to go under, but guess what, this is CAPITALISM. NOT SOCIALISM.
      • NonLeftistDiggr, on 07/11/2008, -0/+4Seeing how the broker already paid the previous owner for the house, no, I don't see what happens. I see a bunch of shareholders and creditors get FKed..... and waves will be sent through the economy because of that.... which will help self-correct the original problem for the long term.
      • RationalXubrnce, on 07/11/2008, -0/+1 I don't know do you? Do they just lose their house? Seriously what happens?
      • zebov, on 07/11/2008, -0/+2As far as I understand, the homeowners aren't in trouble at all. The folks in trouble are 1) Fannie Mae and Freddie Mac stockholders (who are screwed no matter what because the government ain't gonna give them squat) and 2) the investors who purchased "Fannie Mae or Freddie Mac Guaranteed" mortgages. Basically, FNM and FRE guaranteed folks that no matter what, they would get the principal and interest from mortgages they purchase off of banks no matter if the home-owner defaulted or what. They paid FNM or FRE a small fee for this guarantee. Now, if FNM and FRE go bust, then the guarantee is no longer there and they are dependent on the home-buyer to satisfy their loan which, in the case of FNM and FRE loans, is often relatively risky (because of the whole sub-prime crap).

        So, the homeowners aren't really affected other than the fact that they were permitted to buy a home they couldn't afford from the get-go.
      • mousky, on 07/12/2008, -0/+1Yes I do want companies to go under.
    • bullhead2007, on 07/12/2008, -1/+3What happened is that in 1913 the Federal Reserve bankers took over our government. The Fed Bankers caused the great depression in the 1930's, and they're doing it again to grab more wealth and assets from the American people. In the 1970s they took away our gold backed currency and even made it illegal to own gold.

      Just follow the money trail.
  • Chassit, on 07/11/2008, -8/+13***** communist *****.
    • andy314159pi, on 07/11/2008, -1/+6So communists were underwriting corporate risk?
      • Chassit, on 07/11/2008, -3/+2Moronic strawman unworthy of a real response.
      • krnldmp, on 07/11/2008, -1/+5You could probably see how overlooking illegal activity in one of the nation's largest businesses until it totally collapses to the point where the government can "afford" to OWN IT ALL might be seen as some kind of ***** communist plot, especially when you're ultimately talking about the land all the the goddam foreclosed buildings are on too. This is bad, bad *****.
      • andy314159pi, on 07/11/2008, -1/+1wait you think this means that the government is going to take possession of private property? I am pretty sure that this is not what it means at all.
  • insomniacal, on 07/11/2008, -0/+8I just don't understand how it's in the public's best interest to bail out this kind of incompetence. The market is able to correct itself; just add in some legal oversight. What happened to patience and a little resilience?
    • catbeller, on 07/11/2008, -1/+5The market cannot rectify this disaster, not without economic collapse and currency devaluation. Americans won't and don't understand that the bankers and the derivative traders and all the other "Smartest Guys in the Room" just walked off with all our money and left us with the bills. We have been screwed. And we're too stupid to understand how. Still going on about "the invisible hand"... the invisible hand takes your wallet, your farm, and your life. The IH has no limits, because it's just a metaphor. The reality is a few thousand really rich bastards who run the markets and just laughed themselves into hernial ruptures at the sight of us calling for a market correction. They made trillions pumping and selling the housing bubble, and they are awaiting the collapse so they can spend that cash buying up the America they don't yet own at a massive discount.
      • Vocifer, on 07/12/2008, -0/+2I think you mean the Visible Hand, extended by the arm of Greenspan, Bernanke, and your corporate masters.
  • idavidtang, on 07/11/2008, -1/+9Why should us taxpayers be responsible for other peoples financial mess? It's like flinging their own crap to us to clean it up for them.
    • rowjimmy, on 07/11/2008, -2/+3you see, i wouldn't mind public money going to housing if it had from the get-go, and did so in a sensible and responsible way. but this isn't just like suddenly instituting social-welfare programs - this is an obvious bail-out for rich speculators who have made millions on the incompetence of the american people, and who now risk losing their shirts (and perhaps tanking the economy) when a nation of millions of idiotic consumers comes to fruition.
    • charm803, on 07/11/2008, -1/+4No wonder rich people hate paying so much taxes.
      The government doesn't use the money wisely, and instead of getting their financial EDUCATION, the gov. wants to bail them out.

      lskfjoaisdjf!!!!!!
    • savagesteve13, on 07/11/2008, -1/+6Its not other peoples financial mess. Its what happens when big business goes wild, knowing that a government bailout is always available when the screw up.
      Fannie Mae and Freddy Mac should have been government entities, not private corporations. It is the worst of both worlds, where taxpayer money is used to enrich the coffers of private industry.
  • SpartanErik, on 07/11/2008, -0/+3If this does end up happening (which it might), could the government at least set up a taxpayer-pay-back plan once these companies get back on their feet?
    • Pissoff, on 07/11/2008, -0/+2Isn't it just like they're buying the loans?

      It doesn't mean people with loans suddenly owe nothing does it?

      I hate this *****.
  • fuzzynyanko, on 07/11/2008, -0/+2Buying them out is better than a handout since it'll be done with taxpayer money (or borrowed money from China), but bleh. We shouldn't be in this mess
    • tehjarvis, on 07/11/2008, -0/+2Neither should happen. They made the mistake, let them pay for it. I don't see people's tax money coming my way when I buy ***** I can't afford.
  • Changa, on 07/11/2008, -0/+8“My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.”
    -Grover Norquist

    I think the goal now it not to cut it in half but to ***** up enough to do the second part.
  • FFandMMfan, on 07/11/2008, -0/+7So basically...
    If the government bails them out, the economy collapses and we double our debt.
    If the government does not bail them out, the economy collapses and tons of mortgages are rendered useless.
    ***** awesome.
    • GnralHavoc, on 07/11/2008, -7/+4Damned if you do, damned if you don't. HOORAY Capitalism
      • Pronoiac, on 07/11/2008, -2/+4Neither the government bailing them out or creating an environment for these kinds of irresponsible loans to be given in the first place are capitalist acts in any way.
      • Stochio, on 07/12/2008, -1/+3I don't think you know what that word means.
      • NorthMass, on 07/12/2008, -0/+3What are you talking about? If we practiced Capitalism in its true form and not this Capitalist-Socialist hybrid we practice currently in America the government wouldn't be bailing out these companies. Are you that unaware of what Capitalism truly is?
    • Pissoff, on 07/11/2008, -0/+2Someone tell me what the hell it means?

      So "mortgages are rendered useless" means what? Houses suddenly explode?

      • korvan504521, on 07/12/2008, -1/+2People get kicked out of the house, but with no one to buy it or occupy it, the house plummets in value because of lack of maintenance. Banks don't rent out houses when they seize them, they have no personel to manage that. They just try and sell the house, but if no one is buying. . .

        Two hundred years ago, mass foreclosures like this would have triggered immigration to a frontier to start over. We got nowhere to go right now. Things look very grim indeed.
    • mousky, on 07/12/2008, -0/+2I pick the second option. Let the market weed out the weak. If the government bails out companies, there is no incentive to change.
  • jamada88, on 07/11/2008, -8/+1I hope, the Bush era will soon be over. Go Obama!
    (Ron Paul is still my favorite, but sadly he's out...)
    • rowjimmy, on 07/11/2008, -2/+8you're joking, right? obama's economic policy is 99.9% the same as every other corporate owned politician - profit for the top 1%, cuz they're the ones with enough money to matter!
    • vexingmodstwo, on 07/11/2008, -2/+8Dude. This article is a perfect time for you to educate yourself. Do it!

      This whole ***** crisis started because the government created these two companies and still basically tells them what to do. This is the mortgage industry. Just think of the mess we'll be in in 20-30 years when the same ***** happens in the Health Care industry and every other industry that all these social programs are going to affect.

      Obama wants MORE of these things, not less.
    • ender7074, on 07/11/2008, -2/+5Go Obama? The same Obama that wants to nationalize the oil refineries? The same Obama that wants to nationalize health care? You, sir, are an idiot. You really should try to understand what you are voting for. Too bad it wont happen...
    • GnralHavoc, on 07/11/2008, -2/+5Obama wants more government programs to do just this, he probably would have already bailed out these guys
    • rowjimmy, on 07/11/2008, -1/+3I don't think it is completely fair to blame this problem on socialized-programs. Socialized programs, if run properly, can be a preferred alternative to free-market solutions (in some sectors, given certain governments, a certain type of population, etc). However, "socialized" programs that are only so in name, and might more correctly be described as private interest colluding with government in order to "legitimately" monopolize certain sectors (which, in reality, is what Obama wants more of) will almost inherently run into these types of problems, as they syphon of any possible social capital to fatten the pockets of business interests, rather than re-investing in and improving social infrastructure.
      • vexingmodstwo, on 07/11/2008, -2/+3But that's the problem... human nature makes it virtually impossible for socialized programs to run properly. The scope of any program that would involve the US is so massive that the latter part of your comment (after "However") is pretty much the case every time.
      • rowjimmy, on 07/11/2008, -0/+6i've seen them work in Scandinavia very well (lived in Norway, then Denmark for 4 years, and traveled in Sweden a lot). Granted, those are MUCH smaller populations, and much more homogeneous societies (and, as they have become less so on both counts, they have run into a lot more problems with their social-welfare systems).

        I'm *very* wary of blaming greed on human nature though, and much more willing to call it an obvious outcome of the societies in which we (the Western world, and increasingly the whole world) live in.

        All that said, I think that smaller scale (community? county? state?) social-programs could do a FAR better job than any current federal system, especially given the level of corruption run rampant through every aspect of our government.
      • GnralHavoc, on 07/11/2008, -1/+1If it's on a state level I will agree with you, because what works in one state these days isn't the same for another.
  • dontudare, on 07/11/2008, -1/+11Is it just me or Fannie Mae and Freddie Mac sound like porn names?
    • bdbr, on 07/11/2008, -0/+3They're made up names for the Federal National Mortgage Association & the Federal Home Loan Mortgage Corporation. They were created by the government, hence the word "Federal" at the beginning of both.
  • hotcoffeeburns, on 07/11/2008, -0/+8it's their fault. why the hell should the government bail them out?
    • Angostura, on 07/11/2008, -0/+2You seem to be under the impression that if Fanny and Freddy go under, only the people who took out loans they cannot afford will find their homes repossessed.
  • vexingmodstwo, on 07/11/2008, -3/+13Ain't socialism grand?
    • savagesteve13, on 07/11/2008, -1/+4Its not socialism, its "corporate socialism". You privatize profit and socialize risk. That is, the private corporation makes all the money and the government assumes all the risk.

      The last time this happened is when Reagan nearly wiped out our economy by deregulating the S&L's. McCain's bank failed and he swindled people for hundreds of millions. The government had to bail out the industry because private business simply cannot be trusted.
      • bjornski, on 07/11/2008, -0/+1It's what got McCain involved up to his ears in the Keating scandal, too.

        Here, read up on John and the Keating 5 incident.

        http://www.google.com/search?q=keating+5&ie=utf-8& ...

        His financial adviser Phil Gramm has been involved in all sorts of "rich get richer" schemes. ENRON, deregulation of the commodities market, and now with his help in destroying the economy, he has the gall to call everyone "whiners"?

        Time for some of these bastards to be swinging from streetlamps.
  • RationalXubrnce, on 07/11/2008, -2/+6 Freddie Mac and Fannie Mae helped cause this mess. They made so much easy mortgage money available that they drove the prices of houses into the stratosphere. The prices rose to meet the supply of available cash. A deliberate bubble or what I call targeted inflation.

    And just what kind of shady crap is this whole deal anyway? They give out bad mortgages no doubt enriching the leadership of these firms in the process and then when the whole mess goes bad the government might just step in so we can pay the tab while private individuals reaped the profits? Who are these people? Who was behind this and who made money on this whole scam? These companies are that kind of shady gray area between government and private industry, does anyone even understand exactly who they are?
  • banderwocky, on 07/11/2008, -2/+3Ain't that a sweet sh*t soup y'all are in. I'm converting to Euros.
    • bdbr, on 07/11/2008, -0/+4You're either using Euros already or you're probably lying.
    • korvan504521, on 07/12/2008, -0/+1If the largest economic force in the world crashes, what do you thinks going to happen to the rest of the world? Sunshine and lollypops? If the USA takes the kind of nose dive some people are talking about, it's going to make the great depression look like a rainy day.
      • banderwocky, on 07/14/2008, -0/+1Oh yea, I'm expecting a massive economic sh*t storm coming from the south.
  • frankyfunk, on 07/11/2008, -2/+4From McCain

    The problems of the two companies spilled onto the campaign trail on Thursday when Senator John McCain, the presumptive Republican nominee for president, said he supported federal intervention to save Fannie or Freddie from collapsing.
    • vexingmodstwo, on 07/11/2008, -3/+2And people here call him a rightwing fascist... pfft.
    • Olfster, on 07/12/2008, -1/+1Give the guy a break! He forgot he was a Republican. It happens at his age.
  • charm803, on 07/11/2008, -1/+7First, people need to fix their own credit and stop living beyond their means.

    Second, NO, they shouldn't be bailed out.

    Yes, most of these shady people were offering shady loans, but when it comes to a decision that big, wouldn't you want to look over your contract?

    Even my non-English (at the time) speaking parents sought help in reading their contract.

    Many of these people are driving brand new cars, living off credit cards, buying houses they can't afford.



  • rrife, on 07/11/2008, -1/+0I thought the govt. said they had no intentions of a buy out, just offering some assistance.
    • bjornski, on 07/11/2008, -0/+2That's what they said about Bear Stearns, too.
      • dementia, on 07/11/2008, -1/+1They offered very little assistance to Bear Stearns, just access to the Fed window for long enough to set up a sale to JP Morgan
      • bjornski, on 07/11/2008, -0/+2You're right. They didn't get much assistance.

        We just gave JP Morgan the money to take them over.
  • fenderjazz, on 07/11/2008, -1/+8Alright. Before, I was just concerned. Now I'm genuinely afraid of where we're headed.

    If only there were some sort of Libertarian politician who had the balls to get rid of the Fed and get us out of this economic hole we've dug ourselves...
    • skinnyskittles, on 07/11/2008, -1/+2If only...
    • alexkreuz, on 07/11/2008, -2/+2There are Libertarian politicians with balls. That's not the problem.

      If only stupid lazy Americants would elect Libertarian politicians with balls. If only ...

      We reap what we sow.
    • skinnyskittles, on 07/11/2008, -0/+2i'm pretty sure fender's statement was sarcasm
    • cmapes2, on 07/12/2008, -0/+2Gee, there was someone right on the tip of my tongue that was going to do just that, but everyone was too ***** stupid to vote for him...
  • JoeVet, on 07/11/2008, -4/+6"You've heard of mental depression; this is a mental recession ......We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline"

    "Misery sells newspapers," he said. "Thank God the economy is not as bad as you read in the newspaper every day."

    - Phil Gramm, John McCain's top economic adviser.

    Do you want a President who enlists Gramm to handle our economy? If he can't see a problem, how is he going to fix it?
    • RationalXubrnce, on 07/11/2008, -0/+1 Pleeeze. As if any president is ever going to fix this mess. Only one guy was even talking about it and there's an army of people in every economics thread that come running to call his followers Paultards. And that's on a website of so called "progressives."
      • JoeVet, on 07/12/2008, -2/+2Personally, I'd rather have Gramm than Ron Paul. Paul has no understanding of modern economics and would take us back to the days of the barter system. No modern banks for him. Even better though is a real economist such as Obama's economic advisor, Austan Goolsbee. http://faculty.chicagogsb.edu/austan.goolsbee/webs ...
    • ChayD, on 07/11/2008, -0/+1Well, for a start he's got too many "M"s in his last name
  • Sainthax, on 07/11/2008, -6/+7Nice to know the tax on my $80k a year is going to cover the people who can't manage their finances.
    • Mattrix, on 07/11/2008, -3/+7LOL douche bag... your comment seems as though you just wanted to tell everyone how much you make a year. Totally not relevant to this story!
      • Stochio, on 07/12/2008, -1/+2Nice to know the tax on my $10,000,000 a year is going to cover the people who can't manage their finances.
  • GnralHavoc, on 07/11/2008, -0/+45 trillion dollar mess, so you know after they lost the first trillion they didn't look at themselves and say "Maybe we are doing something wrong here?"
    • korvan504521, on 07/12/2008, -0/+1It doesn't work like that. They kept loaning out cash to buy houses, partly because the government ordered the lenders to help low income folks get mortages. Then those folks couldn't even pay for the mortgages they had at the pathetically low interest rates they were being charged (compare our interest rates to the 70s and 80s) and they started defaulting.

      But THEN the newspapers blew it all out of proportion and investors started pouring out. These two banks only actually stand to foreclose 1% at most. But their stock value has dropped more than 50%! Does that make any sense to you?
  • DaDrake, on 07/11/2008, -1/+11Guys the bailout --- if it happen --- would be 16-40 billion dollars (not 5.3 TRILLION). They have 5.3 trillion of backed debt, but unless 100% of fix mortgages actually default... they are only responsible for the current 0.66% (which they fear could hit 1%).

    But yea, if the US government didn't help them (if they went under)... the European Union bank would. They are just too big and they ARE a government sponsored corporation (meaning, they were CREATED by the USA).
    • krnldmp, on 07/11/2008, -0/+4Dude, Several Hundred billion dollars have already been dumped into this mess from sources all over the world to try and stop the hemorrhaging. You actually think 40 billion dollars would fix the problem?
      • JHB800, on 07/12/2008, -0/+2You don't understand the concept of a 'takeover', do you? The government would literally take over the banks and they would become part of the Federal banking system, and would assume their debt as well.
    • bjornski, on 07/11/2008, -2/+2Which European bank? Someone like UBS? The bank where John McCains financial adviser works?

      They're failing too. With his help.

      http://www.ft.com/cms/s/0/b9cb81f4-4ee0-11dd-ba7c- ...



  • Fetching more discussions...
    Show 51 - 78 of 78 discussions
  •  

    Login or register to add a comment

    Create a new account or login to join in the conversation on Digg. You'll also be able to Digg stories to help promote things you like.


© Digg Inc. 2008 — Content posted by Digg users is dedicated to the public domain.
DIGG, DIGG IT, DUGG, DIGG THIS, Digg graphics, logos, designs, page headers, button icons, scripts, and other service names are the trademarks of Digg Inc.