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Fannie & Freddie Weekend Wrap Up/Linkfest

Sunday, September 07, 2008 | 03:00 PM

in Bailouts | Credit | Financial Press | Weblogs

So much for a relaxing weekend! We spilled plenty of pixels on Fannie (FNM) & Freddie (FRE)this weekend, as did lots of other folks. What follows is all of the relevant commentary I could scratch together:

Here's TBP recap:

• Treasury Takeover of GSEs: 10 Key Points

• Fannie & Freddie Bailout: In terms of Conservatorship, Management, Shareholders, Mortgages, Legislation, Foreign Holders, Financial sector, Politics, Timing, & GSE Insolvency

• Here Comes the Half Trillion Dollar Fannie/Freddie Bailout!

All of the Treasury, Federal Reserve and FDIC news releases:

Treasury Department
http://treasury.gov/press/releases/hp1129.htm

Treasury Department Reports (PDFs):

FHFA Director Lockhart Remarks on Housing GSE Actions

Fact Sheet: FHFA Conservatorship

Fact Sheet: Treasury Preferred Stock Purchase Agreement

Fact Sheet: Treasury MBS Purchase Program

Fact Sheet: Treasury GSE Credit Facility

Freddie Mac Warrant to Purchase Common Stock

Freddie Mac Certificate

Freddie Mac Senior Preferred Stock Purchase Agreement

Fannie Mae Warrant to Purchase Common Stock

Fannie Mae Certificate

Fannie Mae Senior Preferred Stock Purchase Agreement

Federal Reserve
http://www.federalreserve.gov/newsevents/press/bcreg/20080907a.htm

Chairman Bernanke
http://www.federalreserve.gov/newsevents/press/other/20080907a.htm

FDIC React to Takeover
http://www.fdic.gov/news/news/press/2008/pr08078.html

Fannie Mae & Freddie Mac Shareholder Ownership, via MSN:

• Federal National Mortgage Association: Ownership

• Freddie Mac: Ownership

Video Coverage:

Treasury News Conference:
Treasury Unveils Takeover of Freddie and Fannie - Part 1

Treasury Unveils Takeover of Freddie and Fannie - Part 2

Treasury Unveils Takeover of Freddie and Fannie - Part 3

John Authers, FT

GSE Bazooka Fired Ticker Forum, Karl Denninger (Video)

Wall Street Research

GSE Rescue Plan: Market and Economic Implications Morgan Stanley
http://www.morganstanley.com/views/gef/index.html#anchor6881

Mark-to-Market Now Mark-to-Taxpayer First Trust
http://www.realclearmarkets.com/articles/mark-to-market_now_mark-to-taxpayer_.pdf

Welcome to the U.S.S.R. (United States Socialist Republic) Citigroup (PDF)

The end of America's bad mortgage dream Financial Post
http://www.nationalpost.com/opinion/columnists/story.html?id=27dccda7-61d0-461d-a83e-a3c79530c814

First thoughts on the market impact of the Treasury's GSE plan, Goldman Sachs (PDF)

Unblocking the arteries, price support and intervention Nomura Securities
(Blocked_Arteries_PArt 1.pdf ) (Part II PDF) (Blocked_arteries Part 3.pdf )

The Long and Short of the Fannie Mae and Freddie Mac Rescue Northern Trust (Web PDF)
http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0809/document/dd090808.pdf

Paulson Begins Gradual Wind-Down of GSEs within Conservatorship, Institutional Risk Analyst

“Somebody’s got some splain’n to do!” Raymond James
http://www.raymondjames.com/inv_strat.htm

Deja Vu (Again) John P. Hussman
http://www.hussman.net/wmc/wmc080908.htm

Hank Punts on First Day of Pro Football Season Cumberland Advisors
http://www.cumber.com/commentary.aspx?file=090808.asp&n=l_mc

Welcome To The Mortgage Business Ciovacco Capital Management
http://www.ciovaccocapital.com/sys-tmpl/mortgagenew/

Pershing Square Capital Letter to Treasury Department Regarding Fannie and Freddie

This Crisis Is Not Over John Mauldin, Paul McCulley, Michael E. Lewitt
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2008/09/08/this-crisis-is-not-over.aspx

What the Mainstream Media had to say:

Wednesday, September 10, 2008

Reduced Exit Packages Urged for Ousted Executives NYT
http://www.nytimes.com/2008/09/10/business/10comp.html

Government intervention is losing its market mojo WSJ
http://online.wsj.com/article/SB122100183460716949.html

Fannie, Freddie Takeover Jolts Preferred Market as Prices Fall Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2eUYQafZCU8&

Federal Mortgage Success Stories NYT
http://www.nytimes.com/2008/09/10/business/10home.html

Tuesday, September 9, 2008

Fannie Mae, Freddie `House of Cards' Prompts Takeover Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3pTtizqxtcA&

Fannie, Freddie To Be Removed From S&P 500 WSJ
http://online.wsj.com/article/SB122099815669516745.html

A Risky High-Wire Act NYT
http://www.nytimes.com/2008/09/09/business/09big.html

Fat Fannie and Freddie L.A. Times
http://www.latimes.com/news/opinion/la-ed-fannie9-2008sep09,0,7271059.story

A desperate but necessary bailout MSN
http://articles.moneycentral.msn.com/Investing/SuperModels/a-desperate-but-necessary-bailout.aspx

FANNIE/FREDDIE BAILOUT BALONEY NYPost
http://www.nypost.com/seven/09092008/postopinion/opedcolumnists/fannie_freddie_bailout_baloney_128135.htm

U.S. Plan Serves as Template For China to Bolster Its Markets WSJ
http://online.wsj.com/article/SB122089797255310905.html

Analysts mixed over bailout's impact on builders MarketWatch
http://tinyurl.com/6fx86u

McCain May Privatize Fannie, Freddie; Obama Sees Federal Role Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1ujoLiLLz78&

Freddie's dead Guardian
http://www.guardian.co.uk/commentisfree/2008/sep/08/freddiemacandfanniemae.useconomy

A New Fannie and Freddie Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/08/AR2008090801908.html

Fannie & Freddie: Buying friends in D.C. CNN/Money
http://money.cnn.com/2008/09/08/news/companies/fan_fred_buying/?postversion=2008090908

Fannie, Freddie need restructuring to limit risks: IMF Reuters
http://www.reuters.com/article/ousiv/idUSLAG00304420080909

Rescue Risks Setting Stage For New Woes WSJ
http://online.wsj.com/article/SB122091498820212291.html

Fannie, Freddie Takeover Ends Lobbying Effort Bigger Than GE's Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aA6fdeTelSDQ&

Reinventing Two Mortgage Giants: A Big Rebuild or a Teardown? NYT
http://www.nytimes.com/2008/09/09/business/09future.html

Mortgage Bailout Is Greeted With Relief, Fresh Questions WSJ
http://online.wsj.com/article/SB122088294934209997.html

Sen. Dodd Questions Fannie-Freddie Takeover NPR
http://www.npr.org/templates/story/story.php?storyId=94407478

Rescue of Mortgage Giants Displays Paulson’s Clout NYT
http://www.nytimes.com/2008/09/09/business/09bush.html

Bailout Hits U.S. Agenda WSJ
http://online.wsj.com/article/SB122092489265913267.html

Monday, September 8, 2008

US Is "More Communist than China": Jim Rogers CNBC
http://www.cnbc.com/id/26603489

The truth about Fannie and Freddie Salon
http://www.salon.com/tech/htww/2008/09/08/fannie_and_freddie_bail_out/index.html

Beginning of the Financial "Surge" Barron's
http://online.barrons.com/article/SB122065674811905571.html

Saving the People's Bank of China Slate
http://www.slate.com/id/2199564/

U.S. To Take Over Mortgage Giants Fannie, Freddie NPR Audio
http://www.npr.org/templates/story/story.php?storyId=94365278&ft=1&f=1001

Mounting Woes Left Officials With Little Room to Maneuver WSJ
http://online.wsj.com/article/SB122083060663308415.html

Fannie, Freddie Credit-Default Swaps May Be Settled Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajsxbVS.W2lQ&

The Dilemma of Fannie and Freddie NYT
http://www.nytimes.com/2008/09/08/business/08norris.html

In Crisis, Paulson's Stunning Use of Federal Power Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/07/AR2008090702486.html

The How, Why and What Of Fannie-Freddie Plan MORNING BRIEF
http://online.wsj.com/article/SB122085653625309655.html

Few Stand to Gain on This Bailout, and Many Lose NYT
http://www.nytimes.com/2008/09/08/business/08scorecard.html

Fannie, Freddie aftershocks: More bank woes CNN/Money
http://money.cnn.com/2008/09/07/news/companies/fannie_freddie_aftershocks/

No End Yet to the Capital Punishment WSJ
http://online.wsj.com/article/SB122083722708908863.html

As Crisis Grew, a Few Options Shrank to One NYT
http://www.nytimes.com/2008/09/08/business/08takeover.html

U.S. Takeover of Fannie, Freddie Offers `Stopgap' Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRHL3uYQjJWM&

U.S. Poised for Bigger Role WSJ
Mortgage Bailout Marks the Return Of Federal Activism
http://online.wsj.com/article/SB122083088815508425.html

Fannie, Freddie and You: What It Means to the Public NYT
http://www.nytimes.com/2008/09/08/business/08consumer.html

Paulson's Seizure The New York Sun
http://www.nysun.com/editorials/paulsons-seizure/85327/

Big intervention should assure America's recovery Times of London
http://business.timesonline.co.uk/tol/business/columnists/article4699475.ece

Sunday September 7, 2008;

A delicate balance in the Freddie and Fannie action FT
NOTE: This is by Mohamed El-Erian, PIMCO's CEO
http://www.ft.com/cms/s/0/33ddd0ac-7cf7-11dd-8d59-000077b07658.html

U.S. Unveils Takeover of Two Mortgage Giants NYT
http://www.nytimes.com/2008/09/08/business/08fannie.html

and my favorite headline, if only for its uniquely wonderful timeliness:

S&P slashes Fannie, Freddie preferred stock to junk Reuters, September 7, 2008
http://tinyurl.com/6heygb

Treasury Extends Secured Credit Line to Federal Home Loan Banks Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=af5C3f6SpmFo&

Washington takes over Fannie Mae, Freddie Mac MarketWatch
http://tinyurl.com/6bcdmy

Paulson Engineers US Takeover of Fannie, Freddie Bloomberg
http://www.bloomberg.com/apps/news?pid=20601103&sid=ajcw4yxxPGJ8&

After The Bailout Forbes
http://www.forbes.com/home/2008/09/07/fannie-freddie-mortgage-biz-wall-cx_lm_0907fanniefreddie.html

Fannie and Freddie 101 CNN/Money
http://money.cnn.com/2008/09/07/news/economy/velshi_comments/index.htm

US takes over key mortgage firms BBC
http://news.bbc.co.uk/2/hi/business/7602992.stm

Fannie, Freddie Takeover Changes the Game, TheStreet.com
http://www.thestreet.com/story/10436132/1/cramer-fannie-freddie-takeover-changes-the-game.html

Takeover seen easing loan crisis Boston Globe
http://tinyurl.com/5udx68

Fannie, Freddie: The biggest losers Fortune: names largest shareholders: FRE: Bill Miller, the Legg Mason (12%), Capital Research & Management of Los Angeles, (10%) AllianceBernstein (6%), Pzena Investment Management, both of New York (5%). FNM: AllianceBernstein (12%), Capital Research (11%), Dodge & Cox 11%).
http://money.cnn.com/2008/09/07/news/economy/shareholder_wipeout.fortune/

U.S. Outlines Fan-Fred Takeover WSJ
http://online.wsj.com/article/SB122079276849707821.html

U.S. seizes Fannie and Freddie CNN/Money
http://money.cnn.com/2008/09/07/news/companies/fannie_freddie/index.htm

US mortgage giants Freddie Mac and Fannie Mae taken into public ownership Guardian
http://www.guardian.co.uk/business/2008/sep/07/freddiemacfanniemae

How plan protects taxpayers CNN/Money
http://money.cnn.com/2008/09/07/news/economy/Fannie_Freddie_rescue_cost/index.htm

Saturday September 6, 2008:

Paulson Plans to Bring Fannie, Freddie Under Government Control Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=azJ2NQoKxMnE&

U.S. Nears Rescue Plan For Fannie And Freddie Washington Post, A01
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/05/AR2008090503351_pf.html

Questions, and Hope, on Plans for Mortgage Giants NYT
http://www.nytimes.com/2008/09/06/business/06credit.html

Pulling the Trigger for Fannie and Freddie? Barron's (Online 9/6/08)
http://online.barrons.com/article/SB122065346802205333.html

US government takes control of Fannie and Freddie FT
http://www.ft.com/cms/s/0/79ea39b6-7b97-11dd-b839-000077b07658.html

Friday September 5, 2008;

U.S. Near Deal on Fannie, Freddie WSJ Online
http://online.wsj.com/article/SB122064650145404781.html

Paulson Meets With Bernanke, Fannie Mae, Freddie Mac Chiefs Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=ax0ft0S9hVYk&

Former Regulator: Move On Freddie, Fannie Now Washington Post
http://voices.washingtonpost.com/washbizblog/2008/09/former_regulator_move_on_fredd.html

U.S. Rescue Seen at Hand for 2 Mortgage Giants NYT
http://www.nytimes.com/2008/09/06/business/06fannie.html

And what else is being said around the blogosphere:

Fannie and Freddie's Bust and Deeply Flawed Government Bailout Nouriel Roubini, RGE
http://www.rgemonitor.com/roubini-monitor/253501/fannie_and_freddies_bust_and_deeply_flawed_government_bailout

Fisher Plays Down Fed Role in Fan-Fred Real Time Economics
http://blogs.wsj.com/economics/2008/09/08/fisher-plays-down-fed-role-in-fan-fred/

Fannie/Freddie MBS: Have You Ever Seen One? Bill Gross Must Not Have Mr. Mortgage
http://mrmortgage.ml-implode.com/2008/09/06/fanniefreddie-mbs-have-you-ever-seen-one-bill-gross-must-not-have/

Bye Bye Banks: Freddie and Fannie Preferred Holders to Take Big Hits? naked capitalism http://www.nakedcapitalism.com/2008/09/bye-bye-banks-freddie-and-fannie.html

Paulson's Statement on Freddie and Fannie with a Nearly Simultaneous Translation JESSE'S CAFÉ AMÉRICAIN
http://jessescrossroadscafe.blogspot.com/2008/09/text-of-paulsons-statement-on-freddie.html

When markets are wrong -- Why the Fannie-Freddie bailout is a bad sign L.A. Land
http://latimesblogs.latimes.com/laland/2008/09/when-markets-ar.html

Fannie and Freddie: CDSs, $1.47 Trillion Triggered The Financial Ninja
http://benbittrolff.blogspot.com/2008/09/fannie-and-freddie-cdss-147-trillion.html

Don't Say You Weren't Warned Financial Armageddon
http://www.financialarmageddon.com/2008/09/dont-say-you-we.html

Winners, losers in the U.S. takeover of Fannie/Freddie Money & Co,
http://latimesblogs.latimes.com/money_co/2008/09/who-wins-and-wh.html

Bill Gross Was Correct — Treasury To Take Over Fannie & Freddie Fundmastery Blog
http://www.fundmasteryblog.com/2008/09/06/bill-gross-was-correct-treasury-to-take-over-fannie-freddie/

GSEs and Other Financial Institutions Overstate Capital Base Mish's Global Economic Trend Analysis
http://globaleconomicanalysis.blogspot.com/2008/09/gses-and-other-financial-institutions.html

“Equal-Weight” a Wipeout? The Least Helpful Calls You Will Get Today Jeff Matthews Is Not Making This Up
http://jeffmatthewsisnotmakingthisup.blogspot.com/2008/09/equal-weight-wipeout-least-helpful.html

If it's Sunday, it must be bailout time Blogging Stocks
http://www.bloggingstocks.com/2008/09/09/if-its-sunday-it-must-be-bailout-time/

Who Holds the Old Maid? John Mauldin, Investor Insight
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2008/08/30/who-holds-the-old-maid.aspx

The Fannie/Freddie Bail-Out: Why Now? Huffingtonpost.com
http://www.huffingtonpost.com/hale-stewart/the-fanniefreddie-bail-ou_b_124624.html

History: Fannie, Freddie Seized by Federal Government Housing Wire
http://www.housingwire.com/2008/09/07/history-fannie-freddie-seized-by-federal-government/

Having It Both Ways Floyd Norris, NYT
http://norris.blogs.nytimes.com/2008/09/07/having-it-both-ways-2/

Fannie & Freddie Thoughts Calculated Risk
http://calculatedrisk.blogspot.com/2008/09/fannie-freddie-thoughts.html

Details and Text on the Fannie/Freddie Bailout Infectious Greed
http://paul.kedrosky.com/archives/2008/09/07/ofheo_has_best.html

The Fannie-Freddie bailout: As much as they need LA Times
http://latimesblogs.latimes.com/laland/2008/09/the-fannie-fred.html

Fannie, Freddie, and Schrodinger's Cat Economics Unbound
http://www.businessweek.com/the_thread/economicsunbound/archives/2008/09/fannie_freddie.html

Fannie/Freddie - Massive Fraud Breakdown Mr. Mortgage
http://mrmortgage.ml-implode.com/2008/09/07/fanniefreddie-massive-fraud-breakdown/

Bush Administration Social Democracy: Smart or Dumb? The Semi-Daily Journal Economist
http://delong.typepad.com/sdj/2008/09/bush-administra.html Brad DeLong

The Reality Based Community and Frannie Bronte Capital http://brontecapital.blogspot.com/2008/09/reality-based-community-and-frannie.html

Freddie, Fannie: No Exit? EconLog
http://econlog.econlib.org/archives/2008/09/freddie_fannie_1.html

Freddie, Fannie and (Sort of) Federal Home Loan Bank Bailout naked capitalism
http://www.nakedcapitalism.com/2008/09/freddie-fannie-and-surprise-federal.html

The Frannie Bailout and the Prisoner's Dilemma Market Movers
http://www.portfolio.com/views/blogs/market-movers/2008/09/07/the-frannie-bailout-and-the-prisoners-dilemma

What if we didn't bail out the creditors? Marginal Revolution
http://www.marginalrevolution.com/marginalrevolution/2008/09/could-you-clari.html

U.S. Government Default: Good, Bad, or Just Plain Ugly? Liberty & Power
http://hnn.us/blogs/entries/53544.html

Rescuing Frannie Market Movers
http://www.portfolio.com/views/blogs/market-movers/2008/09/06/rescuing-frannie

Why is FRE/FNM Being Underplayed? Infectious Greed
http://paul.kedrosky.com/archives/2008/09/05/why_is_frefnm_b.html

Fannie and Freddie, and Why the Accounting Gimmicks Continued Robert Reich
http://robertreich.blogspot.com/2008/09/fannie-and-freddie-and-why-accounting.html

Just one question on the Fannie and Freddie bailout The Mess That Greenspan Made
http://themessthatgreenspanmade.blogspot.com/2008/09/just-one-question-on-fannie-and-freddie.html

Paulson Rolls The Dice At Taxpayer Expense Mish's Global Economic Trend Analysis
http://globaleconomicanalysis.blogspot.com/2008/09/paulson-rolls-dice-at-taxpayer-expense.html

Fannie Mae and Freddie Mac reveal some things markets cannot do Telegraph
http://blogs.telegraph.co.uk/mick_fealty/blog/2008/09/08/fannie_mae_and_freddie_mac_reveal_some_things_markets_cannot_do

The rescue of Fannie and Freddie by Hankie and Feddie Willem Buiter, FT
http://blogs.ft.com/maverecon/2008/07/the-rescue-of-fannie-and-freddie-by-hankie-and-feddie/

Fannie and Freddie Enter the Presidential Race Washington Wire
http://blogs.wsj.com/washwire/2008/09/06/fannie-and-freddie-enter-the-presidential-race/

Obama, McCain, Fannie and Freddie: A Troubled Love Story Deal Journal
http://blogs.wsj.com/deals/2008/09/05/obama-mccain-fannie-and-freddie-a-troubled-love-story/

Fannie and Freddie Go Under: Yes, This Was Predictable Dean Baker, American Prospect
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=09&year=2008&base_name=fannie_and_freddie_go_under_ye

Freddie-Fannie Takeover: Good news or Bad News? Economics Unbound http://www.businessweek.com/the_thread/economicsunbound/archives/2008/09/freddie-fannie.html

HousingPANIC calls for the resignation of Ben Bernanke, who just weeks ago said Fannie and Freddie would be just fine HousingPANIC
http://housingpanic.blogspot.com/2008/09/housingpanic-calls-for-resignation-of.html

Older, worthwhile reading:

Fannie Mae Looks Like Hell November 16, 2007
http://bigpicture.typepad.com/comments/2007/11/fannie-mae-look.html

Fire the bazooka Economist, Aug 28th 2008
http://www.economist.com/opinion/displaystory.cfm?story_id=12009702

SPONSORING RECKLESSNESS
James Surowiecki THE NEW YORKER July 28 2008
http://www.newyorker.com/talk/financial/2008/07/28/080728ta_talk_surowiecki

The way forward for Fannie and Freddie Lawrence Summers July 27 2008
http://www.ft.com/cms/s/0/b150d388-5bf8-11dd-9e99-000077b07658,dwp_uuid=5db90a0e-4e6c-11dd-ba7c-000077b07658.html

Moral hazard misconception Ricardo Caballero, Martin Wolf, Lawrence Summers
FT July 14, 2008
http://blogs.ft.com/wolfforum/2008/07/moral-hazard-misconception/

Compensating Taxpayers in the Fannie Mae and Freddie Mac Bailouts
Ingo Walter | Jul 16, 2008
http://www.rgemonitor.com/financemarkets-monitor/252998/compensating_taxpayers_in_the_fannie_mae_and_freddie_mac_bailouts

An Analysis of the Systemic Risks Posed by Fannie Mae and Freddie Mac
Elisa Parisi-Capone
RGE, Sep 5, 2006
http://www.rgemonitor.com/blog/editorial/144556

~~~

If I missed anything worthwhile, please add in comments, and I will move the items up top eventually . . .

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Tracked on Sep 8, 2008 5:15:07 AM

Comments

Any guess which way the futures will react to this? Or how the foreign markets will take this?

Posted by: Spector | Sep 7, 2008 3:15:26 PM

The company had made decisions that, while not necessarily in violation of accounting rules ...
-- Gretchen Morgenstern, NYT, 6 Sep 2008

... the war situation has developed not necessarily to Japan's advantage ...
-- Hirohito, Emperor of Japan, 15 Aug 1945

Posted by: Roger Bigod | Sep 7, 2008 3:23:34 PM

I wonder why we haven't connected the dots between Bill Gross's announcement Thursday morning on PIMCO's website that his firm would no longer be buying any bank or mortgage paper without further Federal assurances, the subsequent 3% drop that day of the markets worldwide, and Paulson's announcement on Saturday that, indeed, the Gov't will insert itself.

Posted by: Curious | Sep 7, 2008 3:28:42 PM

The common and preferred are worthless on FRE and FNM since they will take the losses first and the gov't owns 80%.

Israel banks are up today, interestingly enough.

Anyone that gave FRE or FNM the loans they used to fund the mortgages is guarenteed.

So basically all other banks but FRE, FNM and any other close to BK should rise come monday.

Posted by: John Borchers | Sep 7, 2008 3:31:47 PM

It is good to know that there is somebody like Barry Ritholtz. Sir, you outdo the cable news channels and newspapers who have billions more dollars and thousands more people to work with.

The ball is in the foreign creditors' court. Will they be happy with the status quo, and if not, will they do anything about it or continue with business as usual?

Posted by: Paul Jones | Sep 7, 2008 3:34:05 PM

Thanks Barry for one heck of a job on pulling all of this information together in one place.

Great Job!!

Posted by: BG | Sep 7, 2008 3:38:35 PM

As Belushi so succinctly stated in Aninal House: "Did we give up when the Germans bombed Pearl Harbor?!!!".

Pay no attention to the man behind the curtain!

Posted by: Johnny B Good | Sep 7, 2008 3:49:31 PM

Cramer's got this one right ---- the market SCREAMS higher on Monday. Shorts are going to feel like guinea pigs at a snake farm. I think the SKF gaps below 100 and moves as far as the low 90s.

Posted by: Eric | Sep 7, 2008 4:00:21 PM

You missed a link:
http://lolfed.com/2008/09/07/all-your-banks-are-belong-to-us/

:-)

Posted by: haileris | Sep 7, 2008 4:12:04 PM

I'm sitting this one out..."it don't make sense to fool Mother Nature!!!"

Posted by: JustinTheSkeptic | Sep 7, 2008 4:38:57 PM

Great round-up BR.

SKF here at 116. Cut it or hold out?

Posted by: Youngtrader | Sep 7, 2008 4:39:33 PM

But if I had alot of money I'd buy the world and be a rational king, a practical king...oh hell, I think I'll just be China.

Posted by: JustinTheSkeptic | Sep 7, 2008 4:40:47 PM

You are just amazing. Thank you so much.

As to a comment from Curious: about connecting the dots...

I think you and I may have had dot connection issues, but the big banks and the crashing markets clearly were a one two punch to the US Gov't to do something and do it now.

Wasn't there a nice hissy fit around the time of the Bear Sterns fiasco too, and then weren't the markets on a steady trend higher for the next few months.

I am betting on some nice sailing through to that Presidential Election in US.

Posted by: Elvira | Sep 7, 2008 4:48:38 PM

so where does it end? automakers next? how about that medicare? maybe inevitable and maybe necessary, but it is indeed a sad day in America.

Posted by: cloudy | Sep 7, 2008 4:51:12 PM

I'm not finished pouring through this mountain of #!X$^&, but it really seems to me to be a half-assed attempt to do as little as possible and push the ultimate disaster down the road.

Posted by: D.Rich | Sep 7, 2008 5:01:42 PM

This isn't about the old MBS, not really. This is about the rest of the banks repackaging (new) MBS to sell to the GSE's at par. This is the "fix" for the insolvent banking system and represents the "all clear signal" for banks to pile onto the GSE bailout fund. This is a mechanism for loss transfer. This is a false-flag operation to re-capitalize an insolvent banking system. Lockhart said specifically that the GSE's would be able to expand the book with no limitations. What does this mean to you? NO LIMITATIONS TO THE SIZE OF THEIR BOOK. The book will swell like mad until all banks have offloaded the l3 garbage, and then the shadow-inventory will be dumped. PAULSON DEFRAUDED THE AMERICAN PEOPLE......AGAIN.

Posted by: Undercover | Sep 7, 2008 5:14:36 PM

Bill Miller, the Legg Mason mutual fund manager, was Freddie Mac's largest shareholder as of July 31, with 12% of the company's stock.

Others Freddie investors include Capital Research & Management of Los Angeles, with a 10% stake as of June 30, and AllianceBernstein and Pzena Investment Management, both of New York, with 6% and 5%.

Holders of Fannie common shares include AllianceBernstein, with 12% of outstanding shares, and Capital Research and Dodge & Cox, of San Francisco, each with 11%, according to data from LionShares.com.

Posted by: Bill Miller | Sep 7, 2008 5:24:58 PM

Lehman in fresh shake-up of top executives

The head of Lehman Brothers’ international operations is stepping down, triggering a broader shake-up of senior management at the embattled Wall Street bank.

Jeremy Isaacs, the long-serving chief executive of Lehman’s businesses in Europe and Asia, is giving up his executive role and will leave the bank at the end of the year, according to people briefed on the plans.

Benoit Savoret, chief operating officer for Europe and the Middle East, and Andrew Morton, promoted this year to run Lehman’s key fixed income division, are also stepping down.

The shake-up, the latest in a series of management changes at Lehman in recent months, comes as the bank tries to shore up its balance sheet, which has been weakened by the credit crunch.

The bank has been talking to the Korea Development Bank about buying a stake and the Financial Times has learnt that Royal Bank of Canada considered buying the bank in July, but decided against a deal.

One leading institutional shareholder in Lehman says the investment bank’s negotiations with RBC and other potential investors raise doubts about whether the current round of talks will succeed.

Posted by: Peter Thal Larsen | Sep 7, 2008 5:39:42 PM

Markets opening.
Stocks up big.
Dollar down.
Treasuries down.
Oil up.

Posted by: Jodie | Sep 7, 2008 6:03:10 PM

One of your better jobs in all these years, Barringo!

We get an incredible amount of quality here for free. Good job and thanks for being a news and analysis hound.
--
On the whole Freddie and Fannie business:

Net, net... I expect this will improve confidence in credit markets and just might have prevented a total freeze-up of the commercial paper market... a disaster of proportions even the most pessimistic of us could hardly fathom.

The circular diagrams of relative portfolio size and mortgage market vol that you reprinted in an earlier post - and the smallest circle representing Fannie and Freddie's relative net worth - tell the story completely.

As you well remember, Benber N. Anke's most significant writing to date was last year's Jackson Hole epistle. You may remember that I analyzed it almost line-for-line.

Fannie and Freddie would've never gotten into this situation had they not decided to Trip The Light Fantastic and attempt to magnify their returns on the backs of the very providers of equity capital that give them their bread and butter... the good faith buyers of their syndicated mortgages... by hedging them to the brink of destruction.

By doing that, they ran the risk of collapsing the asset prices of the investors that sustain their core mission and purpose... but unfortunately for them, they'd acquired too great a portfolio of those instruments for themselves. Thus, they wrote the check for their own demise.

Reckless EBITDA... Reckless pro-forma EBITDA... Reckless Supply Side Hocus Pocus Economics. Reckless, reckless... reckless.

Now, the government will re-in-stall the core purpose of Fannie and Freddie, with or without any fractional preservation of shareholder equity (that's not clear to me yet) and in doing so, the government just might not (I say might not) take a loss.

Poor Fannie and Freddie... they'd have been contentedly sitting on only reduced expectations for income, not the expectations for a collapse of their net worth, had they simply s-t-a-y-e-d with the purpose that was their bread and B-U-T-T-E-R.

Posted by: Eclectic | Sep 7, 2008 6:08:39 PM

I'm still wondering who is going to pay those depart Executives' severance packages.

It seems minor, perhaps even petty to spend time considering the issue, but my tax-paying self really doesn't appreciate paying for these asshats' Golden Parachutes. Their failure and corruption has been compensated and rewarded enough.

I'd say it's time for them to simply leave after the Government is done with them, and be happy that they still have paychecks for another few months. They're not exactly living hand-to-mouth methinks, they can suffer with the rest of us down here for a while... enjoy the fruits of their labors.

--mf

Posted by: Monkeyfister | Sep 7, 2008 6:16:16 PM

Over/Under on when we see Richard Syron in handcuffs?

November 1st?

Posted by: Ugh Ughstein | Sep 7, 2008 6:18:37 PM

Knock-a'nother-homer Hank! But wait??? They tore old Fulton County Stadium down...not to mention Milwaukee County Stadium.

Posted by: JustinTheSkeptic | Sep 7, 2008 6:19:59 PM

Will the true home-run king please stand up and bow! Paulson, Paulson, he's our man...if he can't do it, go fishing.

Posted by: JustinTheSkeptic | Sep 7, 2008 6:22:45 PM

Jodie, you don't happen to be one of those cross-gender types? :-)

Posted by: JustinTheSkeptic | Sep 7, 2008 6:25:01 PM