Posted: Thu Sep 30, 2004 9:09 am Post subject: THE Freddie Mac & Fannie Mae Thread (merged)
In his letter Warren Buffet has called the derivative market a financial weapon of mass destruction which is about to blow. He especially mentioned Fannie and Freddie which are the biggest players in that field.
Only a few months ago Greenspan warned that the sheer size of Fannie and Freddie posed great danger to the financial stability of the US. He also reiterated that the government would not bail them out in case of problems.
Those problems appear to have arrived today. An investigation has been opened on Fannie Mae.
link link
If these allegations are true, this would easily be the biggest accounting scandal in human history. It's ramifications would be staggering. Not only for the US and the US dollar, but since almost every international bank has a large exposure to Fannie and Freddie it could induce a new international crisis.
I remember following a link from another forum a couple of months ago - about how Fannie Mae & Freddy Mac were on the verge of crashing. I never heard anything more about it though. Obviously somebody's been keeping tabs on them. I wish I could remember where I saw it because it described the financial ramifications if they were to crash. It also referred to large sums of money (referred to as 'M3') that were being.......printed?????? to keep Fanny Mae and Freddy Mac afloat. I don't know what M3 means, and does it sound too 'far out' to say it was being printed? Forgive my ignorance with the terminology, but your post caught my attention.
M3 is the credit card money supply, I believe. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
The various measures of money supply, M1, M2, M3, etc. refer to different definitions of money in the economy, much like sweet crude oil is a different definition of oil than conventional oil. M2 is a more liberal definition than M1, M3 is more liberal than M2, and so on. [urlhttp://invest-faq.com/articles/regul-fed-m123.html]link[/url]
Quote:
The US Federal Reserve Board measures the money supply using the following measures.
M1
Money that can be spent immediately. Includes cash, checking accounts, and NOW accounts.
M2
M1 + assets invested for the short term. These assets include money- market accounts and money-market mutual funds.
M3
M2 + big deposits. Big deposits include institutional money-market funds and agreements among banks.
M3 is often discussed because it is a very broad measure of money supply - it is supposed to measure almost all available monies.
The report your talking about is an article form the Ferguson Report, by former Senator Tim Ferguson. I don't know how to post the link but the URL is: link
This will give you a list of different articles. Honestly, I don't know which one it is as it doesn't have Freddie or Fannie in the title but it is in there somewhere.
Joined: Aug 12, 2004 Posts: 1180 Location: England
Posted: Wed Dec 22, 2004 3:46 am Post subject: Senior Fannie Mae bosses resign !
link
Financial irregularities in the second largest US financial institution!
Looks like another factor to add to the "Perfect Storm" about to hit us all! _________________ Peak Oil? crap Happens !
Yeah, The hits just keep on coming.
So, if they dig deep you could be looking at a collapse of a major financial institution. Didn't this trigger the crap storm in Argentina?
Combine this with the new Islamic Fundamentalist government about to be elected in Iran and the collapse of the Northern Ireland peace process when it is discovered that the IRA pulled off the $40 million robbery on Monday and it's a very unprosperous New Year for us all. _________________ www.askaboutenergy.com
Joined: Aug 12, 2004 Posts: 1180 Location: England
Posted: Wed Dec 22, 2004 3:58 am Post subject:
Quote:
Freddie Mac, the country's other largest mortgage firm, was forced to restate its earnings by $4.4bn last year and pay a $125m fine after an investigation of its books.
Looks like they are all at it !!
Remind me not to hire an American accountant ! _________________ Peak Oil? crap Happens !
I was afraid of that. link Luckily the $9 billion is a lot less than the $25 billion which was previously assumed. But I'm curious on how this is going to pan out. Somehow they have to replace the missing money and to strengthen their financial position. That means that they probably have to increase their rates.
Joined: Aug 17, 2004 Posts: 3541 Location: 39° 39' N 77° 77' W or thereabouts
Posted: Wed Dec 22, 2004 6:58 am Post subject:
Madpaddy wrote:
Yeah, The hits just keep on coming. So, if they dig deep you could be looking at a collapse of a major financial institution. Didn't this trigger the crap storm in Argentina?
Argentina? That reminds me, I heard this on the radio. Seems if the US was Argentina it would be in a lot worse shape.
This program is about cuts in US Social Security: link
Quote:
AMY GOODMAN: Paul Krugman, what about the devaluation of the dollar and its impact?
PAUL KRUGMAN: Not sure what it has to do with Social Security, but we are having a -- look, the United States is running huge twin deficits. The federal government is borrowing $1 billion a day or so for the operations. The United States as a whole is borrowing $1.5 billion to pay for imports. Those can't go on forever. It's a law that says that things that cannot go on forever don't, and it appears that the world is finally looking at it and saying, “Gee, we don't see this changing,” and so, the money flows are starting to dry up. The dollar is falling. We don't know how it plays out. If this was a Third World country, and you had the numbers we have, you would say, “Oh, my God, start stocking up on canned goods,” because we look by many of the numbers worse than places like Argentina or Indonesia. But it is the United States. We get a lot of the benefit of the doubt. The debts are in dollars, which is some protection, having the debts in our own currency. But it's going to be -it just adds to the difficulties.
The "old geezers" in the contrarian camp have been yelling about this stuff for years - guess they're finally being proven right huh. _________________ Live quotes - crude oil, gold and currencies
http://www.post1.net/lowem/page/livequotes
Joined: Jul 21, 2004 Posts: 327 Location: Chicago, IL
Posted: Wed Dec 22, 2004 8:57 am Post subject:
Good quote, Babypeanut.
Paul Krugman, the world's best international economist, once said that if it were any other country than the United States running such deficits, it would have already turned into a banana republic. The "benefit of doubt" leads to an even worse situation, because the crash will be harder and longer, with the difference being that the trigger point comes when the situation is worse than it normally would have been required for any other country. Although Krugman does not mention Peak Oil, I think his political column in the New York Times is interesting (Paul Krugman Archive)
Joined: Oct 26, 2004 Posts: 305 Location: US Empire
Posted: Wed Dec 22, 2004 9:58 am Post subject:
Quote:
PAUL KRUGMAN: Not sure what it has to do with Social Security, but we are having a -- look, the United States is running huge twin deficits. The federal government is borrowing $1 billion a day or so for the operations. The United States as a whole is borrowing $1.5 billion to pay for imports. Those can't go on forever. It's a law that says that things that cannot go on forever don't, and it appears that the world is finally looking at it and saying, “Gee, we don't see this changing,” and so, the money flows are starting to dry up. The dollar is falling. We don't know how it plays out. If this was a Third World country
This glosses over the key, overriding issue: that the so-called "social security trust fund" does not in fact exist. The claim that huge surpluses are being mounted is meaningless when all that really exists is an IOU that the government writes to itself.
People imagine that the fund is invested in private stocks and bonds, or government bonds, and conclude that there is no difference between a fund backed by real assets that can simply be sold and a fund that will require raising taxes or additional borrowing on an enormous scale.
Wake up to the real deficit. Hard times are coming... nice correlation with the Peak. _________________ Gary Malcolm
US Empire
There is no alternative source for our gluttony. Power down or die.
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