Just thought you guys & gals would like a lesson in true facism......
WASHINGTON (Reuters) - The U.S. Treasury Department and the Federal Reserve took wide ranging and unprecedented steps on Sunday to boost confidence in embattled mortgage finance giants Fannie Mae and Freddie Mac.
http://uk.reuters.com/article/UKNews1/idUKN1334544220080714
Question, worth 100% of grade, in a short paragraph, explain who owns these two companies, and then tell me why I have to turn my health care over to them, when they show, over & over again, they can't handle the responsibility ?
Fannie Mae & Freddie Mac
Discussion in 'News & Current Events' started by Bro. Curtis, Jul 14, 2008.
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Bro. Curtis <img src =/curtis.gif>Site Supporter
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Didn't work. Share price dropped on Mon.
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Their stock holders own them. What has it to do with your health care?????
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Bro. Curtis <img src =/curtis.gif>Site Supporter
Both are U.S. Gov't institutions. Both operated, and owned by Uncle Sam. Gov't run private businesses. Just like pre-WWII Germany.
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You aren't being a very good global citizen by bringing this up Bro. :smilewinkgrin:
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Govt controls them by setting rules but they are owned by their stock holders. Anyone can buy shares.
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Bro. Curtis <img src =/curtis.gif>Site Supporter
Yup. And they'll own stocks in a company that doesn't pay taxes, and operates without any federal oversight.
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Full Article...Why should Fannie Mae and Freddie Mac enjoy special tax and regulatory privileges unavailable to other publicly traded corporations? Why should U.S. taxpayers be required to lend them money, or pick up the tab if they can't pay their bills?
The answer of course is that Fannie and Freddie should get no such privileges and taxpayers should not have to protect them.
Fannie and Freddie are specially privileged "government-sponsored enterprises." They're exempt from state and local taxes. And their required "core capital" (mainly stock) is merely 2.5 percent of assets, compared with a 6 to 8 percent norm for banks. As a result, their $5.3 trillion of debt is piled precariously atop a thin cushion of only $81 billion in core capital. It's risky business. But who bears the risk?
Fannie and Freddie pay an artificially low interest rate on their bonds because everyone assumes that, if it came to it, the U.S. Treasury would bail them out. The artificially fat spread between interest rates earned on mortgages and interest rates paid on bonds amounts to a big subsidy. That thwarts competition. It also undermines market discipline, because creditors have little incentive to monitor the firms' borrowing and investments.
Another unique privilege has been a $2.5 billion line of credit with the U.S. Treasury. Not enough?
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Bro. Curtis <img src =/curtis.gif>Site Supporter
Contrary to a common misimpression, Fannie and Freddie provide no mortgages. They just buy bundles of mortgages from lenders and swap them for mortgage-backed securities. They also invest in private mortgage-backed securities, paying for them by getting deeper in debt.
I guess the apostle Paul was right about throwing out meat for the ones not ready.....some may be too busy choking to respond.
But I won't be talked into looking at Iran or Pakistan as long as this is going on. This is a big deal, despite the lack of exposure. -
Does seem kind of foolish to be threatening the destruction of other nations while our own is so broke nobody here can even afford to pay attention.
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Don't understand this mortgage selling
Say I get a mortgage on my house. I get $200,000. The Bank gets a contract specifying that I will pay so much a month 30 years. This contract has a calculated present value of say $210,000 (a guess, amount doesn't matter). The bank sells this contract. How much would the bank get? How is this problem different than a problem of selling good $100 bills? Why would someone pay more than or ask less than $100 for a $100 bill?
Does the bank make more money on the sales fees than it would on the interest received? -
Bro. Curtis <img src =/curtis.gif>Site Supporter
These two banks don't seem to be making ANY money, Bill. A bank that operates outside the laws most have to abide by, and we still have to bail them out, and it doesn't look like it's gonna be cheap.
You see it as business as usual, I see it as a bunch of millionares playing with my money, and losing. With a big wink on Uncle Sam's part.
I guess we'll just have to agree to disagree. -
A related story:
http://www.baptistboard.com/showthread.php?t=51528