The great bailout of 2008: bail, baby, bail

Reading Time: < 1 minute March 16: Bear Stearns, $29 billon Sept. 6: Fannie/Freddie, $200 billion Lehman Brothers: sorry baby no bail AIG: $85 billion Who is the next??? Essentially Fed/Treasury are transfering the downside risks from individual companies to the fed/treasury/greenbacks. Note the money pledged to support Fannie/Freddie/AIG could exceed the original number if the problem worsens. I can… Continue reading The great bailout of 2008: bail, baby, bail

Fannie Freddie and the market

Reading Time: < 1 minute Fannie/Freddie Short term I think it’s a deal for fed. But long term (it seems nobody is caring about long term these days), why should China continue to buy the Fannie/Freddie debt, for some premium over the US treasuries with substantial mortgage market risk (liquidity). I agree the US treasuries and Fannie/Freddie debt are co-related.… Continue reading Fannie Freddie and the market

The great bailout of Fannie Freddie

Reading Time: 2 minutes (Update, according to WSJ) The deal in summary: the US treasury dept. will put up to 200 billion ($100 billion each) to support the mortgages loss from Fannie and Freddie; the treasury will buy $1 billlon of preferred shares for 10% divivend, the preferred are senior to all other preferred previously issued (I believe all… Continue reading The great bailout of Fannie Freddie

Fannie and Freddie crisis, InBev snaps AB

Reading Time: < 1 minute Fannnie and Freddie crisis I read Burham’s beat Fannie Mae’s Golden Goose article last Friday, after seeing the dramatic stock actions of FNM and FRE on that day. Following that, I also reviewed Barrons March 11 article, IS this Fannie Mae Toast? Yeah, it looks like it. The bad thing is, those executives at Fannie… Continue reading Fannie and Freddie crisis, InBev snaps AB