Gumby's Account Talk

[fedgolfer]

wow, the dollar is just paper at this point. these guys have so much ammo. part of me says it sounds scary part of me believes Hank when he says, don't bring a pea-shooter when you know i'm holding a bazooka. look at the one-month on the financials -- quite possibly, we're putting in a handle on a cup and handle. with today's new and sentiment, its gonna be hard for people to buy in... they could really rip it north since it seems so easy to buy SKF here.

 

[luv2read]

Debt ceiling up again :nuts::worried:! I'm turning into a Blue Dog Democrat! Hellpppp!

Democrats abandoned efforts to mandate specific protections for taxpayers, such as a requirement that the companies suspend dividend payments to shareholders as a precondition of receiving federal aid. Instead, the measure instructs Paulson to set the terms of any bailout.

The other thing that really fries me about this is that when they gridlock over raising the debt ceiling and "temporarily borrow" from the trust funds (TSP, etc.) to keep the government running, interest payments to those accounts are suspended. They assure us that the accounts are "made good" once the debt ceiling is lifted and funding is in place, but it's all just on paper and I've never seen an official notice that the borrowing has ended and/or accumulated back interest has been paid. IMO the Dems were on the right track about suspending dividends to Fannie/Freddy shareholders as a precondition of receiving federal aid. If they suspend interest payments to trust funds (TSP, CSRS, etc. which is OUR money) to bailout the government, then private investors should feel the bite as well if there's a TAXPAYER bailout of their PRIVATE company.

 

[Gumby]

If they suspend interest payments to trust funds (TSP, CSRS, etc.) which is OUR money to bailout the government, then private investors should feel the bite as well if there's a TAXPAYER bailout of their PRIVATE company.

I agree....all they are doing is privatizing gains and socializing losses. I have read that foreign investors own most of the Fannie/Freddie paper. It is hard to believe that investors that should have huge losses may eventually have a gain once the smoke clears the mirror. The Fannie and Freddie stock should be worthless, dividends suspended and executives of these companies should be in the unemployment line.......or better yet - in jail.

 

[Gumby]

BUSH SIGNS BAILOUT

Here are some of the lowlights:


A stronger regulator for the GSEs. The new regulator will have a greater say over how well funded the two government sponsored enterprises (GSEs) are - a major concern in the markets that has sent stocks in both companies plunging in the past two months.
A permanent increase in "conforming loan" limits. The law will permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000.
The FHA maximum loan limits for high-cost areas would also increase to a maximum of $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because those mortgages are more likely to be traded if they are considered conforming.
A new home-buyer credit. The new law includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.
The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.
A ban on down-payment assistance from sellers. The new law eliminates a program that has allowed sellers to provide down payment assistance for FHA loans.
The law would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.
A new affordable housing trust fund. The law establishes a permanent fund to promote affordable housing. The fund will be paid for by fees from Fannie and Freddie.
Grants to states to buy foreclosed properties. The law grants $4 billion to states to buy up and rehabilitate foreclosed properties. The White House has opposed such funding, contending that it will benefit lenders and not homeowners.
Bolster Fannie and Freddie
A late and controversial addition to the new housing law provides temporary authority for the Treasury to lend a financial hand to Fannie Mae and Freddie Mac if the Treasury deems it necessary to help stabilize markets.
Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market has sent shares plummeting in recent weeks. Since the beginning of June, Fannie's stock price has dropped 57% and Freddie's plummeted 66%. For the past year, they're both down roughly 85% as of the end of trade on Friday.
Fannie and Freddie guarantee the purchase and trade of mortgages and own or back $5.2 trillion in mortgages.
The law includes provisions that let Treasury offer Fannie and Freddie an unlimited line of credit and buy stock in the companies. The provisions expire in 18 months.
Both critics and supporters of the Paulson plan have expressed concern that loaning or investing money in the companies could leave taxpayers with a fat bill to pay.
Treasury Secretary Paulson has said that merely having the powers in place may boost confidence in the two companies enough to preclude the need for Treasury to step in.
The Congressional Budget Office last week estimated the potential cost of a rescue could be $25 billion. CBO said there is probably a better than 50% chance that Treasury would not need to step in. It also said there is a 5% chance that Freddie's and Fannie's losses could cost the government $100 billion.

Full story on CNN
http://money.cnn.com/2008/07/30/news/economy/housing_bill_Bush/index.htm?postversion=2008073007

 

[Gumby]

White House says U.S. avoided recession





"I think we have avoided a recession," White House Budget Director Jim Nussle said in an interview on CNBC.

Nussle also states:
Separately, Nussle said that the Bush administration doesn't believe it will need to use a recently approved backstop plan for Fannie Mae & Freddie Mac, the two giant mortgage-buyers. President Bush signed the plan into law on Wednesday as part of a major housing bill.




Gumby thinks you are a bit optimistic!



Full story: LINK

 

[XL-entLady]

White House says U.S. avoided recession


"I think we have avoided a recession," White House Budget Director Jim Nussle said in an interview on CNBC.


Gumby thinks you are a bit optimistic!

I so agree, Gumby! Maybe for politicians Attention Deficit Disorder is a communicable disease .... :laugh:

Lady

 

[Corepuncher]

White House says U.S. avoided recession


"I think we have avoided a recession," White House Budget Director Jim Nussle said in an interview on CNBC.

Nussle also states:
Separately, Nussle said that the Bush administration doesn't believe it will need to use a recently approved backstop plan for Fannie Mae & Freddie Mac, the two giant mortgage-buyers. President Bush signed the plan into law on Wednesday as part of a major housing bill.

Gumby thinks you are a bit optimistic!

Full story: LINK

What a crock! :laugh::laugh::laugh:
I'll trust a retired Greenspan over those NIMRODS! It just makes sense we'll continue to slow down and go into a recession. Greenspan just said a few minutes ago that this is a 100 year event in financials, and then once house prices and financials DO stabilize, that we'll have an inflation problem. Not to mention a global slowdown, which will affect the US economy!

 

[Show-me]

white house says u.s. Avoided recession





"i think we have avoided a recession," white house budget director jim nussle said in an interview on cnbc.

Nussle also states:
Separately, nussle said that the bush administration doesn't believe it will need to use a recently approved backstop plan for fannie mae & freddie mac, the two giant mortgage-buyers. President bush signed the plan into law on wednesday as part of a major housing bill.




gumby thinks you are a bit optimistic! :d



full story: link

roflmao!!!

 

[Gumby]

I decided to go 60%C and 40% S today from 100% "I".
The "I" fund has been a huge disappointment this year. It appears the "weak" dollar did not give the fund the boost I anticipated.

This has been the first losing year so far for my TSP account since 2002:blink:
I still have a few months to hopefully make a gain.

Normally, election years are good for the investor......but there are just way to many things going on with the US economy this year. $5 dollar diesel, forclosures, and government bailouts aren't helping either.

 

[nsurf9]

Oh, yea - OPEC, Oil corp majors, and drillers have avoid a recession. I'd be willing to bet several billion (even euros) to 1 on that.

A few others haven't avoided recession so handily.

Currently, the mortgage makers have all found God and until they allow mortgages to those without wings, perhaps our fairy godmother Fanny Mae and/or uncle Freddy Mac can supply us with the new faux-wings to get by in the mean-time.

Oil, according to the monoploy, is running out - just ask them, if you can get them to stop counting their profits. The fact is, you can only rob a limited amount of money at any one time - then, there is no more. And, if they no longer have jobs (or, are hosting the Olympics), you still have to sell oil to somebody, at some diminished price, no matter how much you say you have, or don't have.

 

[Silverbird]

roflmao!!!

Quick sleight of hand, nothing to see here, move along, everything fine. Ignore Mr. Stagflation behind the curtain. He's not Mr. Recession, so don't worry! Watch the numbers stand on their heads! We have happy numbers here. We make sure to give everyone in the U.S. well behaved, hand selected, happy numbers, gleamed out of many, the best of the best.

 

[Gumby]

US Banking System is Doomed

"The Treasury's attempt to reflate the real estate market has not worked, and it can't work ... The banks are trying to win back their losses by arbitrage operations, borrowing from the Fed at a low interest rate and lending at a higher one, and gambling on options."

More info from Business Day


Borrow low and lend high seems to be the name of the game. Maybe the banks are getting some cheap margin money to bet on anything from commodities to equities? I might add, the cheap money will be eventually subsidised by the taxpayer. :blink:

 

[luv2read]

US Banking System is Doomed

"The Treasury's attempt to reflate the real estate market has not worked, and it can't work ... The banks are trying to win back their losses by arbitrage operations, borrowing from the Fed at a low interest rate and lending at a higher one, and gambling on options."

More info from Business Day


Borrow low and lend high seems to be the name of the game. Maybe the banks are getting some cheap margin money to bet on anything from commodities to equities? I might add, the cheap money will be eventually subsidised by the taxpayer. :blink:

They're putting up that junk paper nobody wants as collateral to borrow from the fed too, and it's affecting Treasuries, that's why they've been so erratic lately. They are the new junk bonds.

Hijacked this from Norm's thread - and remember Freddie just posted it's loss this week as well:

More pain at Fannie - $2.3 billion loss

Mortgage finance giant suffers much larger-than-expected loss due to reserves for credit losses and slashes its dividend to preserve capital.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: August 8, 2008: 8:35 AM EDT

NEW YORK (CNNMoney.com) -- Mortgage finance giant Fannie Mae reported a much larger-than-expected loss in the second quarter and slashed its dividend Friday, more signs that the problems in housing and financial markets are not over.
The firm reported a net loss of $2.3 billion, or $2.54 a share. Analysts surveyed by Thomson Reuters forecast a loss of 68 cents a share, compared to earnings of $1.86 a share a year earlier. But large increase in reserves for bad debt and a writedown in the value of its holdings hurt the results.
The company warned of billions more in credit losses this year than it had previously forecast, and said the rate of credit losses is likely to get even worse next year. [more]
[URL]http://money.cnn.com/2008/08/08/news/companies/fannie_results/index.htm?postversion=2008080808[/URL]

read: we WILL be borrowing that $25B PLUS some...everyone ready for the tax increase to pay for the debt?

 

[Guest2]

If the Banks were responsible for the Great Depression and Banks are
Doomed as the article says. Then why are we not in the (G) Fund. Are
we in denial or something.?.

 

[Gumby]

read: we WILL be borrowing that $25B PLUS some...everyone ready for the tax increase to pay for the debt?

That $25B is just going to be a start. After all the credit line from the FED is a blank check.:nuts:

 

[luv2read]

If the Banks were responsible for the Great Depression and Banks are
Doomed as the article says. Then why are we not in the (G) Fund. Are
we in denial or something.?.

Yes...like last year when we ignored BSC's hedge fund collapse warning signal in June and believed the "all is good" hype. Everyone knows the doom and gloom but keeps hoping for that "one more little rally" to get ahead before they get out and sit out the worst yet to come.

 

[Birchtree]

Allah Akbar - I cherish all this negativity - you are doing me a great service.

 

[Gumby]

Maybe this will shed some light on why AIG had a big loss.
I have personally seen many of these tactics used by Insurance companies.
This link is a long read, but will shed some light on this crooked business.

Worst Insurance Companies

Will these bad boys be in line for a FED bailout also?

 

[Guest2]

I was being a bit sarcastic about the Depression thingy. But the
seriousness of the problem within the Banking System is no joke.
It's with great worry that I lean on the side of caution but not to
the point of non participation. :worried:

 

[Birchtree]

There have been insurance companies in the past that were buy out targets by other companies so they could use their tax loss carry forwards. I will be buying more AIG today.