Truemors
is reporting from
Member
NP Rank:
NP Rank:
U.S. plan for Fannie, Freddie to hit shareholders: Takeover announcement expected today
Share:
by dunkelberg | September 6, 2008 at 10:52 pm
457 views | 11 Recommendations | 10 comments
Videos
Paulson announces the siezure of mortgage giants Mac and May
sourced by Emilio Lizardo
Photos
U.S. plan for Fannie, Freddie to hit shareholders: Takeover announcement expected today
uploaded by Milieunet
UPDATE: This happened as anticipated. There is more complete look at the world financial situation HERE, and I recommend it.
This is not your great-grandpa's bailout, but it is meant to reverse the worst housing market since great grandpa's Great Depression. The federal government takeover of Fannie Mae and Freddie Mac is expected to be complete and the largest such bailout in U.S. history.
By John Poirier and Patrick Rucker
WASHINGTON (Reuters) - The U.S. government plans to take over Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) and all shareholders of the two mortgage giants will take a hit, an influential lawmaker said Saturday.
The move to take control of the two companies, expected to be announced Sunday, could amount to the largest financial bailout in the nation's history, and is a bid to ward off further damage to a housing market in its deepest downturn since the Great Depression.
"I think all shareholders will be disadvantaged," Rep. Barney Frank, chairman of the House Financial Services Committee, told Reuters.
"The government will act as the new management," implying the chief executives would be ousted, according to Frank, who spoke to U.S. Treasury Secretary Paulson Friday about the plan to put the companies into federal conservatorship to protect the interest of all parties.
An industry source said the two government-sponsored enterprises were sent a letter by their regulator, the Federal Housing Finance Agency, detailing shortcomings at the companies and explaining why the federal government was taking control.
The source said the letter suggested the companies, which own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt, should agree to the arrangement in order to avoid the more onerous step of being placed in a receivership in the interests of debtholders.
In a separate interview with The Washington Post (nyse: WPO - news - people ), Frank said the government was expected to control the companies for at least a year as it considers whether they should remain government-run, or be restructured.
What is NowPublic?
NowPublic lets people work together to cover news events around the world.
Crowd Power
Milieunet
Utrecht, Utrecht, Netherlands
Emilio Lizardo
Ann Arbor, Michigan, United States
Most RecentMost Recommended Comments (10)
at 23:39 on September 6th, 2008
dunkelberg, I like this story. It's good stuff.
In fact Feddie, Fannie as well as the USA are bankrupt
at 05:49 on September 7th, 2008
I like the way they did their best to handle this nice and quietly over the week-end ...
Source: bloomberg.com
at 07:52 on September 7th, 2008
They could have attracted even less notice. They could have held the news conference next to the dumpster in the parking lot behind Denny's at six Sunday morning.
at 06:05 on September 7th, 2008
The only people for this is the corrupt democratic congress and the self serving Bush administration.
at 06:06 on September 7th, 2008
dunkelberg, I like this story. It's good stuff.
at 08:08 on September 7th, 2008
dunkelberg, I like this story. It's good stuff. Looks like it's happened, dunkelberg!
[q url="http://www.guardian.co.uk/business/2008/sep/07/freddiemacfanniemae"]
The US government today announced the biggest financial bailout in the country's history as it took troubled mortgage giants Freddie Mac and Fannie Mae into temporary public ownership to save them from collapse.
The US treasury secretary, Henry Paulson, said the Federal Housing Finance Agency, hitherto the two companies' regulator, would henceforth run the companies in a state of "conservatorship" and the two chief executives would be replaced by new men.
Paulson had briefed presidential candidates Barack Obama and John McCain over the weekend about the plan. McCain gave it his immediate backing but Obama said he would reserve judgment until he saw further details, adding that determining the future of the companies would be a top priority if he won the White House.
"We have to protect taxpayers and not bail out the shareholders and management," he said.
The plan received the full backing of the Federal Reserve chairman, Ben Bernanke, and financial markets appeared likely to be cheered by the news. The move helped put a prop under one part of the financial system that had been looking particularly shaky for several months.
Rumours of the move on Friday were sufficient to push shares up on Wall Street after the London stock markets had ended a bad week by shedding another 2.25% to close at 5,240.7.[/q]
at 09:28 on September 7th, 2008
They really have no choice. Too many crooked hands in the cookie jar. Everyone will get exposed in an election year. Reminds me of cannons to the left of me, cannons to the right of me except it is crooks on the left, crooks on the right. At least they have something in common.
at 12:56 on September 7th, 2008
Concise report.
at 17:00 on September 7th, 2008
Source: money.cnn.com
at 22:44 on September 8th, 2008
who authorized this? Does this mean we the people now own Fannie Mae and Freddie Mac? Do we the people now own the mortgages on all these over-priced homes? Who holds the notes?