If the rumor du jour is correct, and the Treasury is going to announce plans to inject $15 billion into Fannie and Freddie before trading starts on Monday, the idea of a conservatorship for the GSEs may be off the table. Nevertheless. Adam Levitin of Credit Slips discusses the legal aspects, and this knowledge is […]
Read more...The Times appears to have broken the story (hat tip reader Saboor) that the Treasury is seriously mulling an emergency cash injection into the troubled mortgage giants Fannie and Freddie in the form of some sort of senior equity (the article is not clear on this point, but the Wall Street Journal had mentioned a […]
Read more...Willem Buiter has a characteristically colorful post, “Time for comrade Paulson to pull the plug on the Fannie and Freddie charade” on the prospect of a Fannie and Freddie rescue. Why is it the British can fulminate better than we Americans do? But Buiter’s beef isn’t the operation of the GSEs but the philosophy behind […]
Read more...Nouriel Roubini has consistently been accurate in predicting the course of our snowballing credit crisis, and has also made some important intellectual contributions to the discussion. such as how the breakdown of the Bretton Woods system has lessons for the future of our Bretton Woods 2 currency program. But in my view, Roubini’s post today […]
Read more...The end-game for what was very briefly the nation’s biggest mortgage lender, IndyMac, seemed inevitable, although the signals even as a of a few days ago were that a takeover was not imminent. The timing, coming in the midst of Famnie and Freddie worries, is particularly bad. One can only conclude that this action could […]
Read more...Henry Kaufman, aka Dr. Doom for his prominence and prescience in reading the bond markets during the painful early 1980s credit crunch, said not surprisingly that the Federal government needed to assist Fannie and Freddie. Unfortunately, the more important part of Kaufman’s message is likely to be ignored. The former Salomon Brothers chief economist also […]
Read more...There is a very good op-ed at the Wall Street Journal today by Adam Levitin, who we have often quoted at the blog Credit Slips. It offers a clear explanation of why the Dodd-Frank housing bill won’t accomplish much in the way of borrower relief. Many of our readers will regard that as a good […]
Read more...The New York Time reports that the Federal government is leaning towards conservatorship as the approach for handling Freddie and Fannie’s shaky finances. Under this scenario. shareholders are wiped out and taxpayers fund any losses. What I find disturbing about the mainstream media coverage is the refusal to connect the dots between the increasing demands […]
Read more...Just a few weeks ago, experts were saying the credit crisis was on the mend and we could all get back in the pool. But as we discussed in an earlier post, worries about Fannie and Freddie are on the rise, and the increase in agency spreads back in January was probably the biggest trigger […]
Read more...The Wall Street Journal (hat tip Saboor) sends mixed signals in a page one story for tomorrow, “U.S. Mulls Future of Fannie, Freddie.” The Journal reports that contingency planning in case the two GSEs get into trouble has stepped up, yet go to some lengths to take a reassuring tone: The Bush administration has held […]
Read more...According to Moody’s, the ratings implicit in credit default swaps on Fannie and Freddie treat the government-sponsored enterprises as if they are mere single As, versus their official AAA ratings. Now the real question is: do these marks reflect doubts about whether the implicit government guarantee will be honored, or is this an early warning […]
Read more...We haven’t been covering the spectacle of Indymac twisting in the wind, since highly-regarded blogs like Calculated Risk and Housing Wire follow the mortgage lenders closely. However, the panic yesterday about Fannie and Freddie perhaps having to come up as much aswith $75 billion in equity ($75 billion?) diverted attention from what on any other […]
Read more...Yet more signs of consumer stress. From Bloomberg: Consumers fell behind on loans secured by their homes at the fastest pace in two decades in the first quarter, signaling deeper distress in the U.S. economy, the American Bankers Association reported. Home-equity lines of credit at least 30 days past due rose 14 basis points to […]
Read more...The weakening UK housing market was revealed to be in even worse shape than feared. Prices fell 0.9% in June on top of a record 2.5% fall in May. That puts the British market down a mere 6.3% year to year, which sounds tame compared to the US, until you factor in that UK consumers […]
Read more...In yet another example of synchronicity, Jim Hamilton provides a chart from Peter Hooper that illustrates why the housing market is in the doldrums: securitized credit has all but vanished. This topic came up in the previous post as a explanation of why the real estate market is coming to look like a war zone. […]
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