Fannie Mae and Freddie Mac receive unlimited future funds from taxpayers to stay afloatNEW YORK (AP) — The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.
The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government's estimate this summer of $170 billion over 10 years.
http://www.baltimoresun.com/business/sn ... ?track=rssUh...yeah...
So, if there is no way they will come close to exceeding the $400 Billion limit, then why remove the limit?
Obviously, all is not what we are being told. Pacifying the masses may be socially necessary given the panic the truth would cause, but c'mon...
some of us are actually paying attention. Add this to the fact that FDIC MUST tap their $500 Billion Fed credit line next year and it is clear that the worst is yet to come - and there is no way to postpone the inevitable forever. 2010 will be the year the Piper MUST be paid. The damage done by the Bush years cannot be postponed yet another year (nice try O, but the downside of following through on Bush's ill-contrived plan to "save the economy from collapse" this year means you will catch ALL the blame for what has simply been postponed - the fact that Bush caused this mess has already been forgotten and now it's just you standing in front of the mic while he is in Texas playing with his poodles) Where's all this money going to come from? Debt sales? Who's gonna buy this crappy debt? Hmmm...I wonder...
Who is Buying All These US Treasuries?http://jessescrossroadscafe.blogspot.co ... uries.html...almost no one but the Fed is buying Agency Debt...[and]"...Our concern now is that this is all starting to resemble one giant Ponzi scheme. We all know that the Fed has been active in the market for T-bills. As you can see from Table A, under the auspices of Quantitative Easing, they bought almost 50% of the new Treasury issues in Q2 and almost 30% in Q3. It serves to remember that the whole point of selling new US Treasury bonds is to attract outside capital to finance deficits or to pay off existing debts that are maturing. We are now in a situation, however, where the Fed is printing dollars to buy Treasuries as a means of faking the Treasury’s ability to attract outside capital. If our research proves anything, it’s that the regular buyers of US debt are no longer buying, and it amazes us that the US can successfully issue a record number Treasuries in this environment without the slightest hiccup in the market..."
We should start a pool bet for WHEN California declares bankruptcy. They will be quickly followed by 40 other states who are in dire straits. Will it be possible for the States to go bankrupt, but not the US? Would it matter? No. According to the Center on Budget and Policy Priorities (
http://www.cbpp.org/cms/index.cfm?fa=view&id=711), many of these States will not have anywhere close to the revenues and cuts required to avoid the inevitable. IMHO, the Fed will have to print more money and give it to them to keep them on life support.
Yep! 2010-2011 is going to be a memorable year for the dollar. Just like the anthrax attacks, I look forward to reading about it in the Bangkok Post while sipping my iced tea and getting a massage on some beautiful remote island in Thailand (meh...or over breakfast at home with the wife).
Is Obama doing the right thing? IMHO, he has been trying to do the politically correct things which are at odds with the economically correct things. Allowing the economy to collapse in 2009, as painful as it would have been, would have been the better move. Instead, he chose to spend while the dollar still has value. From that perspective, I can understand WHY he's spending so much as fast as he can, but (despite the pacification of the masses) I know he must know that means the Piper will have to be paid in 2010-2011. There is no way creating more debt could ever be a solution for eliminating it.
Perhaps his strategy is to spend while there is value, put it on the US credit card, let inflation take hold, then pay it off with debased dollars. Who knows? Whatever happens...
The dollar must die.
His prediction of $2,000 /oz. in 2009 did not happen due to some policy changes and Central Bank manipulation (another topic) which has delayed such a move until 2010. 