"5.5 Billion in Capital Raise is just the beginning . . . "
Freddie Mac Losses to Get Worse
August 8, 2008 12:30am by Barry Ritholtz
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Wow…
Put that feel good video up there with the YouTube of the Nuns kicking kittens…
Dave, I hope your not one of those, “let’s pretend the sky is full of diamonds,” type of people? I ask that because of the constant comments from the perma-bulls about how the media is making this down-turn a reality, and that it is all in our heads. I would argue that the media actually has been holding this market up by timing the positive and negative releases in such a way, that they stop the blood-letting, more than they let the blood flow to the street. (Yes, I’m arguing that a truly free market would have us down much further and already picking up the pieces and becoming new again.) Oh! and dare I mention our friendly politicians in Washington and the FED, where there desire to create a Command Economy has become a reality?
The capital requirements imposed on the GSEs by OFHEO are grossly inadequate. Adapting the Basel II capital standards to the special risks faced by mortgage hedgers would require SEVERAL TIMES the capital that Fannie and Freddie currently have.
In relation to Freddie Mac’s assets, a $5.5 billion capital raise is pocket change. You might as well try to raise the global sea level by standing on Montauk Point and peeing into the ocean.
““It is part of the general pattern of misguided policy that our country is now geared to an arms economy which was bred in an artificually induced psychosis of war hysteria and nurtured upon an incessant propaganda of fear.” — General Douglas MacArthur, Speech, May 15, 1951
“…artificually induced psychosis of war hysteria and nurtured upon an incessant propaganda of fear.”
was: “more Billions, or the “Communists” willeatyour children”
recently: “more Billions, or the “Terra-rists” willeatyour “Freedom””
now: “many more Billions(we’ll take our pick), or your 401(k) will evaporate”
This racket is so old you can hear, trn down your iPod, it creak..
I don’t get why he thinks the housing market will bottom in 2009. I thought the infamous UBS chart showed resets of Alt-A and Pay Option ARMs of the same magnitude as subprime running all through 2010 – 2011.
“End of 2009” seems to be the new “second half of 2008.”
Which was the new “first half of 2008”.
Prosperity is just around the corner.
.
No, “diamonds in the sky”. I am watch this fiasco happen in SoCal and at the current levels, people with good jobs are seriously hurting, so I can’t imagine what the bottom 50% are going through. If this is going to get worse, and the top fifty percentages are going to feel more pain in the next 12 months, what is going to happen to the bottom.
Justin, I agree that we need a truly free market, because if the institutions were fully exposed to the risk of the financial instruments that they created, then this would be better for the have-nots. By this I mean, don’t have the fed artificially prop up banks, get rid of the 2004 bankruptcy bill (unsecured credit is UNSECURED so deal with it).