More on the situation at Fannie Mae and Freddie Mac: link. It's nauseating.

I was confused on one point. When does a loan get the backing/buy out of Fannie and Freddie? When it is originated? Or does Fannie and Freddie somehow wade into the market afterwards and pick up the loans?

If it's only when it's originated, wouldn't it be the case that any new loans backed/bought out by Fannie and Freddie (even jumbo ones) would have to meet better loan requirements (and reduced risk of default)?

Posted at February 10, 2008 11:20 PM in response to The Stimulus Package: Weak Soup

On a sort of related note, can somebody tell me how to change the email address associated with my profile on the TPM sites? I can see how to change my password. But I can't see where to change my email address.

Thanks!

Posted at February 10, 2008 4:27 PM in response to Crazed by TPM Change Over?

Isn't this mostly the same stimulus package as was passed back in 2001/2002? When the GOP had majority?

Why didn't they tie the damn thing up in committee and let the public know that it's tied up because the GOP won't let the stimulus go where it needs to go - the poor? Are the dems really that inept at hard-ball negotiations? Or could it be that they don't want to acknowledge the poor as their constituency? I wonder.

Posted at January 26, 2008 8:36 AM in response to House Democrats Disappoint?

It's as if when the internet bubble peaked back in 2000/2001, the stock holders colluded and said they were going to hold onto their stock and not sell it until the market rebounded (through other means) at which time they could sell it without taking too bad a loss.  It's no different here.  Except instead of stock holders we're talking mortgage bond investors.   Basically, all the big players are holding a lot of bad debt.  If any one of the players decides to unload, all the other players will have no choice but to follow suit, and there'll be the proverbial blood in the streets (which is when Warren Buffet usually arrives on the scene to buy low).  So the players are looking for anything to forestall that.  One of the options was a superconduit, http://www.econbrowser.com/archives/2007/10/superconduit.html, which seems to be a way for truly distressed players to park some of these bad debts without actually unloading them in the marketplace.  Another option is to prop up the housing market, which is what the Treasury department cooked up (and Bush is touting), the plan being to forestall foreclosures.  Another option is to stimulate inflation, which will in turn stimulate demand for high-yield debts, in turn lowering the value of low-yield debts, allowing investors to cycle through that and replace one with the other. Home-owners can do the same if they have any play money to work with, but this is unlikely, especially if they're sub-prime, and the rates keep indexing up to stay ahead of inflation.

The thing to keep in mind is that the housing bubble was stimulated to help the economy recover from the bursting of the internet bubble back in 2000/2001.  This time, there doesn't seem to be an alternate  bubble that can be stimulated to compensate for the bursting of the housing bubble.  Maybe the chinese stock-market could serve as that, but that already has signs of peaking out.  Basically, there's a lot of money out there trying to find something worth investing in, and there's a lot of bad debt out there trying to find buyers.

Posted at December 9, 2007 6:08 PM in response to The Sandbag Plan

Good read. Especially, "These markets must regulate themselves. The only thing likely to persuade them to do so is the certainty that the players will be allowed to go bust", otherwise, "... capitalism is for poor people and socialism is for capitalists. This view is not just offensive. It is catastrophic." Which I think was the first comment in this thread.

Posted at August 15, 2007 6:11 PM in response to Fed Bailouts and the Bubble Boys

The PCMAG link in the article didn't work for me.  This one did http://www.pcmag.com/article2/0,1895,2170266,00.asp

If you really want to go deeper on this, I recommend starting with this http://www.dslreports.com/shownews/700Mhz-Devil-In-the-Details-86657

Posted at August 15, 2007 5:40 PM in response to Cellphone Users Get the Big Tease from the FCC

Terrorists are evil. The axis of evil is evil. I don't think their foreign policy goes much beyond that.

This administration is nothing if not one of acting at the gut level. Cerebral ideas like "creative destabilization" only give them cover for what their guts tell them to do. Ask yourself, is it imperialism that is playing out in the middle east? Or is it something more emotionally driven?

Posted at August 16, 2006 9:07 PM in response to Ending the War on Terror

Posted at December 20, 2005 12:25 PM in response to NSA Wiretaps

Lame was the first thing that came to my mind too.  Needed a home for my thoughts, so I sent them to Mr. Novak himself ...

Dear Mr. Novak,


If I read your August 1 article right, I believe what you're saying is that: a) you had to make a judgement call on burning Ms. Plame, b) you didn't know that you were playing with fire.


Shouldn't you be willing to accept the consequences of that?  This happens in the business world all the time.  If you burn someone, that means you're braced for the downside as well as the upside.  Otherwise it smacks of wanting your cake and eating it too, and only the priveleged get that.


Regards,

Posted at August 1, 2005 10:51 AM in response to LAME BOB NOVAK