"Blank checks almost always get filled in and cashed," said
Stuart Hoffman of PNC Financial Services Group.>
Chances are better than even that government money will be used to prop up
Fannie Mae and Freddie Mac, according to economists in the latest Wall Street
Journal forecasting survey, and a sizeable minority said the institutions should
be nationalized.
When Treasury Secretary Henry Paulson went to Congress last month
to defend his plan to extend credit to Fannie and Freddie or purchase equity in
the government-sponsored enterprises, if necessary, he made it clear that the
proposal is a "backup facility, [that] hopefully would never be used." However,
sharp losses at the two companies last week and continued concerns about the
U.S. credit market have increased the chance that government funds would be
needed. On average, the 53 economists polled in the survey put the probability
at 59% that the Treasury Department will have to step in to bail out Fannie or
Freddie.
Economists are deeply divided on whether or not we are in a recession, according
to the latest WSJ forecasting survey. WSJ’s Phil Izzo and Kelsey Hubbard discuss
the survey, where many economists agreed we will see a further slowdown
Source:
Odds of Fannie and Freddie Bailout Better-Than-Even, Economists Say
PHIL IZZO
WSJ, August 14, 2008
http://online.wsj.com/article/SB121864245359137157.html
The people who need a bailout right now are those long of silver. Think Ben will write them a check or do direct deposit?
Now Ed McMahon is being bailed out by Donald Trump…truly bailout Nation.
“Economists are deeply divided on whether or not we are in a recession, according to the latest WSJ forecasting survey.”
Then “economists” need to get their heads out and look around. If the destruction of the housing and finance industries, rising unemployment, whiplash between inflation and deflation, and generally incredibly bleak prospects for growth in all sectors does not constitute a recession, then they need a new dictionary.
Just watching a tech conference on EV technology (solar cells), and the meme they’re pushing is that, “soon the carbon fuels cost will cross the EV cost curve, so we might as well bite the bullet and mandate EV…” trilobite tech logic.
Except…
70% of Americans no longer can get credit. I think 20% of homeowners are upside down, isn’t it? And the national savings rate is negative and falling, with inflation at a 17 year high, and that’s ex-food-and-fuel.
By profligate paying-it-backward “economic incentives” that are robbing tax revenues from future years, we’ll have the greatest triumvirate of deficits in history, for a good many decades, if not forever, and now
we’re paying both origination fees and interest on our future tax obligations!!
It’s literally, ‘groceries … or gas?!’
“Hope, dream, dare, Go Team USA” whatever, all these political candidates promising carbon neutrality, universal health care, goal-oriented education vouchers, equal pay for equal work, …yeah!?
Where’s tax revenues going to come from?!
Forget Fannie and Freddie, how about we hope we’re not living in some dumpster?!
Excellent load of ‘reality’ there Grep Tar! One can only wonder where the point is that the bankers will stop ignoring the ‘bottomless pit’?
Or, learn that debt itself is ‘meaningless’.
Our government is bankrupt, plain and simple, yet they choose to ‘ignore’ it…pretty soon (and it may be happening already) people will start to ‘ignore’ their bills too.
Our nation is bankrupt but it continues to function, which should tell you something all by itself.
As with the Iraq war authorization bill, it’s hard not to use that bazooka in your pocket.
Larry Kudlow has lost all credibility. This WSJ survey, and your Aug 4 comments, prove Kudlow has changed his mind multiple times just during this year.
During 2008 Kudlow has said, there will be no recession (Jan-Feb)
There will be a recession (Mar-April)
There will not be a recession (May-July)
There will be a recession (August)
I’ve been tracking this and I’ve never in my life seen an economist flip flop back and forth like this
You’re calling Larry Kudlow an “economist?” I think “entertainer” would be a more apt term, no? He may be a lot of things, but Sir Goldilocks certainly is not “economist”.
Barry,
I’m still confused by Pauson. He uses such oblique, weasely language that it’s impossible to tell if/how the government will get a stake in the company when the bailout occurs. Is the treasury/Fed seriously considering bailing out the current shareholders? If so, they oughta be ashamed of themselves. Someone needs to ask Paulson about this point blank.
If Paulsen bails out the equity shareholders of Fraudy and Fannie, how is this not criminal and basically stealing from taxpayers to give to shareholders? Reverse robin hood at its best/worst (depending on whether you’re receiving or giving).
Since it’s my tax money, I also would like to know who these shareholders/debtholders are (China, Russia, major U.S. Institutions, wealthy investors, etc?). I’m sure that would reveal quite a bit regarding their motivations/intentions.
Of course it is . And it will likely be done anyway. Taxes re going to skyrocket. Where is the public outrage ?
“If Paulsen bails out the equity shareholders of Fraudy and Fannie, how is this not criminal and basically stealing from taxpayers to give to shareholders?”
The people who need a bailout right now are those long of silver. Think Ben will write them a check or do direct deposit?
Posted by: Steve Barry | Aug 15, 2008 12:08:42 AM
Steve,
maybe BB, et al. are bailing out the Shorts in the metals market by shaking the tree of the paper longs..the ‘Banks’ are still huge long (i.e. JPM/GS), aren’t they?
“still huge long”
long = short