Endgame-- The Collapse of Fannie Mae and Freddie Mac
Ron Paul, of course, has been telling the truth all along. The bankster scam is finished-- and has been for quite some time. The liar strategy of coverup, coverup, coverup worked for awhile, but let's all put a bookmark on this day-- July 11, 2008. The day the lies stopped working.
Why today? All you need do is check out the news about Fannie Mae and Freddie Mac: these disgusting "government sponsored entities" have collapsed. In an unintentionally hilarious article from the International Herald Tribune we learn : "Perhaps the biggest single risk facing Fannie Mae and Freddie Mac, and with them financial companies and taxpayers, is that investors might simply lose confidence in the companies, leaving them unable to pursue their core businesses buying home loans from banks and repackaging them for sale to investors. That buying and repackaging is the lifeblood of the American housing economy because it provides the capital that banks and other financial institutions use to write new loans."
Ponder those deadly words for a few moments, and you'll come to understand how it is that the bankster scam has gone so terribly, massively awry. "Repackaging?" How is it that a home mortgage instrument-- a chunk of debt-- can be "repackaged" and "sold to investors?" More debt, that's how. Under the scam, the "investors" simply borrow more money from the banksters at the secondary market level and profit off the interest rate arbitrage spread between what the mortgage obligor (you) is paying and the lower interest rate that the investor pays. The scam allows for a double collection of interest for the banksters on two slices of magic money created out of thin air; a double load of debt pyramided on the homeowner mortgage payment; and a double collapse when the house loses its value and the homeowner walks away. This "double dipping" by the banksters is what the mortgage backed securities crisis is all about, and our touchy--feely Fannie and Freddie are at the heart of the scam.
Of course, any rational investor would be a complete fool to accept a thin slice of arbitrage interest spread in exchange for the quite large and very real risk that the homeowner might walk away from his interest payment and leave the investor with impaired or non--existent collateral for his secondary market instrument. And this is where the bankster scam truly shines through. Congress has NEVER authorized any sort of guarantee or promise to investors from Fannie or Freddie (except for insignificant sums). There is NO guarantee on these secondary market instruments-- never has been, and never should be. But as Fannie and Freddie collapse, you'll read in articles about a so--called "implicit" guarantee from Fannie/Freddie to investors. What on earth is that? Here's what-- there is no legal or legitimate basis anywhere in law (or economic reality) for a Fannie or Freddie guarantee, but the bankster/sellers of these instruments to investors have been going around for years telling the suckers "don't worry, the government (i.e., the taxpayer) will stand behind these instruments; the government (taxpayer) will never let Fannie/Freddie default; the government (taxpayer) will bail you out if anything goes wrong." That's the "implicit" guarantee"-- an illegal and unenforceable promise made by the banksters who profited from the lucrative business of selling and trading these mortgage backed securities in the secondary market. A gigantic falsehood that would land any of us in prison (or worse) if we had attempted such a thing even once, let alone on a systemic scale.
Ah, but won't our fearless leaders Paulson and Bernanke be able to solve things by printing some more fiat money? John McCain thinks so. In one of his typical know--nothing comments, McCain had this to say yesterday about the crisis at Fannie and Freddie: "Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail. They are vital to Americans' ability to own their own homes. And we will do what's necessary to make sure that they continue that function."
Paulson and Bernanke know better. In their testimony yesterday before the House Financial Services Committee, our two cheerleaders in chief declined to comment about what (if anything) our DC/Wall Street brain trust might be able to do to avert the collapse, or bring relief. As Paulson said: "Fannie Mae and Freddie Mac are working through this challenging period. In today's world I don't think it is helpful to speculate about any financial institution and systemic risk. I'm dealing with the here and now."
Why so cautious, Henry? Where's the rah rah? The answer is clear, simple, straightforward-- and devastating to the banksters. There is NOTHING they can do. The scope of the problem is too immense; the bankster magic money system and greed have advanced too far. It's unrecoverable; and there are no tools available to the government or the Fed capable of solving this problem. Our bankster Titanic is about to sink beneath the waves.
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Hopefully they really do fall, and we can arise from the ashes of the wake and hopefully take our country back. That would be truly glorious
Hopefully they really do fall, and we can arise from the ashes of the wake and hopefully take our country back. That would be truly glorious
That happened as the time that the magic money was created. The loss was the theft of the purchasing power of everyone else’s money. Panics are simply when the public realizes that the value is not there in proportion to the magic money that was created. Very few connect the loss they see now in say, mortgage debt entrustments, to the theft that happened when the money was created out of thin air. If the public can be educated to see the connection, the revolution will succeed.
http://www.youtube.com/watch?v=shwzMZNpcpM
http://www.youtube.com/watch?v=vWa9AfkjwoY&feature=related
I am sure you've seen this, but... here it is again...
This may sound sick, but I'm happy that these big institutions are failing! There is going to be a lot of suffering and heart-ache caused by it, but look at the bright side. WE ARE VINDICATED! The current system is broken and we knew it all along! If it continued to prosper, it would mean we were wrong to a certain degree. Only after a complete collapse of the current system can it be rebuilt.
"It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men." -- Samuel Adams
On Friday, Treasury Secretary Paulson announces that financial institutions "must be allowed to fail." Then on Sunday we read that the Treasury Department is planning to inject $15 billion of new capital into Fannie/Freddie in the form of a new class of stock. Meanwhile, Senator Dodd continues his propaganda nonsense on Late Edition, telling Wolf Blitzer that the GSEs are "in a sound situation;" "in good shape;" and to suggest somehow that they're in major trouble "is not accurate." Bottom line-- our so--called leaders have no clue about what might be done to salvage this disaster. The reason? There's nothing that can be done. They're powerless to stop the collapse, and every dollar of taxpayer money "injected" into Fannie/Freddie and our failing banks is a dollar wasted. As Lew Rockwell likes to say, you can't repeal the laws of economics. The only relevant question for the American people is this: how long will we allow this travesty in our leadership to continue? A day? A month? A year? R
. . . magnitude if they (Fannie/Freddie) were allowed to default." So predicts William Poole, a former Fed guy. Hmmm. I wonder why no one from the mainstream media asked him how it is that this "unspeakable" disaster is somehow going to be avoided through a shifting of the loss from banksters to taxpayers. The only thing these bank clowns are really shooting for is preservation of their magic money SYSTEM; the loss will be there whether the banks are bailed out or not. The debate is already shifting to the questions of: (1) who pays (banksters or taxpayers); and (2) who controls the money system after the collapse. This sort of scare talk is designed to make us believe we really, really need the banksters to keep us all afloat. We don't. Let the criminals fall. R
From: http://www.breakthematrix.com/Economy/IndyMac-Bank-Closes-Transfers-Oper...
"IndyMac is the largest OTS-regulated thrift ever to fail and, according to FDIC data, the second largest financial institution to close in U.S. history."
...
"The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Sen. Charles Schumer of New York, according to the OTS. The letter expressed concerns about IndyMac's viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts."
...
"'IndyMac was actively seeking to arrange a significant capital infusion or find a buyer. The recent release of the senator's letter undermined the public confidence essential for a financial institution and took away the time IndyMac needed to pursue a recovery,' the OTS said in Friday's statement."
Thanks Sen. Charles Schumer and thanks Fed! We need your intervention!
the gov't radio address -- the news broadcasted by NPR on 3 major radio stations simultaneously --
the voice spoke of a new tax on hotel stays to help encourage tourism. This is of course the exact opposite of what a tax on hotel stays will do. I was laughing and shaking my head and hoping that someone else heard this report and recognized the lunacy.
This could be a good way to invest however, as soon as a Senator praises the strength of a company one should immediately short as many available shares as one can
Why is it that so much that comes out of government and mainstream media mouths is not merely untrue in some shading or degree, but in fact is the precise OPPOSITE of the truth? The despicable saga of Fannie and Freddie is a case in point (as if we needed another one). All day today I've been reading articles which invariably quote some bozo telling us that Fannie and Freddie are "too big to fail." The truth, of course, is that Fannie/Freddie are "too big to save." The scope of their scam has been so massive that no force on earth has the resources to bail them out. "Government sponsored enterprise" indeed. R
I worked in real estate during the bubble and was aware that the prices were the result of a high class ponzi scheme. I'm not surprised -- haven't we all known this was coming for quite some time.
Still the tears begin to well up when I consider: Where will the ripples stop? Does this means its time to stock up on rice?
I remember hearing about the housing bubble back in 2003 on NPR. I had no idea what they were talking about but I do remember they were afraid this was going to pop just like the dotcom one. They were right, but this one is drastically more serious.
This doesn't just stop on our imaginary geographic lines. This is affecting the entire world and may hurt others even more than it hurts us.
And yet Dr. Paul, and those of us who have been awakened, are still mocked. I just finished the Revolution a Manifesto, and its insane, and tragic, that Ron Paul has been treated like a pariah by so many Americans. The book reads like a prediction of events all around us.
Yo
Our time is NOW.
Chris Dodd (D. Conn.), Chairman of the Senate Banking Committee says today: These institutions [Fannie and Freddie] are fundamentally sound and strong. There's no reason for the kind of [stock market] reaction we're getting." One can only listen in wonderment when such insane words are spoken. R
It appears that these GSEs might actually have a whole-sale takeover by the government to bail them out. At least, that is what is being proposed by Bernake and considered my Congress.
From http://money.cnn.com/2008/07/11/news/economy/fannie_freddie.fortune/?pos... :
"The market and ratings agencies have treated Fannie and Freddie as bulletproof, even though the actual business of dealing with interest sensitive loans is very risky. This is in large part because of the very special perks granted to the mortgage giants, but to no one else.
Each may borrow up to $2.25 billion direct from the Treasury. They are exempt from state and local income taxes and from Securities and Exchange Commission registration requirements and fees. And they can use the Federal Reserve as their bank.
One result of all this special treatment was AAA credit ratings. That means Fannie and Freddie could borrow at super-low rates, a benefit they used to purchase - and hold -high-yielding mortgage loans. The spread between the two provided an irresistible earnings stream and the companies just kept getting bigger."
So these GSEs have received special governmental treatment, have failed, and now it is proposed that the government become even more involved to fix the problem they created. Of course, we trust the government and the Fed to fix things. They know what they are doing, right? They have the best interests of American's and the economy in mind :)
I think you said that the banksters made profit by 2 methods:
1. Fiat money system - Banks are first to use new money at the 9:1 ratio for loan profit.
2. Then more profit by repackageing debt and reselling with an arbitrage spread profit (?).
And now that the scam is collapsing, the consequences are:
1. Loss of homes for people (already happening)
2. Possible depreciation of the value of our money if they "create" more money in attempts to solve the problem?
3. More debt for the US?
4. Possible taxation increase in an attempt to solve the problem?
5. McCain is being exposed as a clueless financial chump (no surprise there)