<p>yeah, but dstark, out of all those points you’re making, the Government IS bailing out freddie and fannie bcos they DID encourage them to make those loans.</p>
<p>dstark :</p>
<p>I like numbers more than communication :). Ou fund was short for many financial for a long time :)</p>
<p>Bluebayou, the government is bailing out commercial and investment banks too.</p>
<p>The government did not encourage investment banks to use 33 to 1 leverage. </p>
<p>Didn’t encourage FNM and FRE to use 50 to 1 leverage either.</p>
<p>Didn’t encourage commercial banks to make loans to people that can’t pay the loans back either.</p>
<p><a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg;
<p>I hope not - SLM, C, WM :(</p>
<p>Aapride, you are in the investment business? Or you are invested in Ken Heebner’s fund? ;)</p>
<p>Government at all levels was feeding at the trough of the home bubblers. Lots of property transfer taxes, real estate brokers, mortgage brokers, insurance companies, construction, etc. pumping in income taxes, sales taxes on big autos and luxury goods.</p>
<p>That’s inflation, a big party followed by a big hangover.</p>
<p>yes to investment business. That is why i asked you bout prop trading :)</p>
<p>Ok. You tell me when I’m full of @@@@.</p>
<p>Are you a prop trader?</p>
<p>I wish I wish :(</p>
<p>It’s not that great. Most prop traders blow up never to be seen again.</p>
<p>Some of the successful ones end up with twitches. 
Better to be a doctor, or have a career where you actually do something for society.</p>
<p>
</p>
<p>Don’t know. We do know that the student loans for 2008 are already being affected in the disappearance of Auction Rate Securities and by the major banks. Students may have to go directly to the DoE for Direct Student Loans rather than choices in Stafford, PLUS loans. </p>
<p>This is on the fringe of our national debate and how we manage our credit and our national education goals for the current and future. Too complicated for all but a few.</p>
<p>dstark:</p>
<p>I disagree. </p>
<p>The US government has definitely encouraged freddie and fanny to leverage…heck, tha IS their mission. Also, the Fed and the govt do often encourage commercial banks to take on risky loans (Mexico, for example), only to bail the banks out later. </p>
<p>btw: The Wall Street Journal has been writing extensively about the two agencies over the past few years, but Congress has done nada, so this is not news…</p>
<p>A discussion about AIG is offpoint unless Paulson is gonna bail it out too. :)</p>
<p>I don’t remember the government encouraging FNM and FRE to leverage 50-1.</p>
<p>Never happened.</p>
<p>AIG is being bailed out. 
The holders of FNM and FRE debt are being bailed out.</p>
<p>What? You want the government to write the banks and insurance companies a check? That’s not how it works. It works exactly the way it is being done.</p>
<p>"For Bill Gross, manager of the world’s biggest bond fund at Newport Beach, California-based Pacific Investment Management Co., today’s announcement was good news. </p>
<p><code>We own lots of mortgage-backed bonds, and I would expect on Monday and in the ensuing weeks for them to do very well,‘’ Gross said in a Bloomberg Radio interview.</code>So yes, I’m smiling at the moment.‘’ </p>
<p>The government didn’t give Pimco any money. Didn’t have too. ;)</p>
<p>U.S. Losses on Fannie, Freddie May Be $300 Billion, Poole Says </p>
<p><a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg;
<p>If you want to see who isn’t smiling, go to finance.yahoo.com and look up the ten largest shareholders of the two companies. The bailout for Pimco is that F&F’s debt is getting backstopped. That’s who the bailout is for - the bondholders.</p>
<p>Two interesting ideas on the commodity smackdown and dollar rocket were that these were needed to announce a rate cut or bail out a major player. F&F are definitely major players but I’m wondering if there will be one more shoe to drop.</p>
<p>Gold and silver are up nicely overnight so the first read on this is that it is inflationary. Some of the numbers that I looked at certainly indicate that the infusions for the year will exceed the destruction in shareholder wealth. The move appears to me to mainly try to save the banking system. There are a lot of winners and losers around that are either going to be smiling or crying tomorrow morning.</p>
<p>Bill Gross may have reason to be smiling if the value of F&Fs bonds head north.</p>
<p>dstark:</p>
<p>Freddie and Fannie are being bailed out bcos Congress encouraged the recklessness and Congress ignored its oversight responsibilities. And, Congress reaped hundreds of thousands of dollars in campaign contributions. </p>
<p>It’s just that simple.</p>
<p>Bill Gross is the smartest sucker of 'em all. :D</p>
<p>I bought a bunch of XLF at 3.50pm on Friday. Looks like it might have been a timely investment?</p>
<p>[Why</a> American Savers Have Drawn the Short Straw](<a href=“Businessweek - Bloomberg”>Businessweek - Bloomberg)</p>
<p>Why American Savers Have Drawn the Short Straw
There are painfully real reasons why America’s savers feel they’ve got the short end of the stick </p>
<p>American savers, take a bow. This is your moment of vindication. Your hour of glory. And you earned it (in a manner of speaking).</p>
<p>You resisted the siren call of plastic teaser APRs, dutifully living within your means to store money for a rainy day. You never took out an interest-only mortgage. Never had to pawn the copper pipes from your exurban McMansion to pay the reset on your liar loan. Your credit score would have gotten you into Harvard at age 12.</p>
<p>Good for you! Your reward: injurious savings yields, inflationary rot, and election-season neglect, all served up with a dollop of institutional insecurity.</p>
<p>Even with a current account deficit that, starved of domestic savings, requires $2 billion a day in foreign financing, economic policymakers are fixated on propping up credit and giving the participants in the housing bubble second chances. In order to do so, they are stripping the hides off of net savers.</p>
<p>Another reason I hate handouts. Without punishment for idiotic personal decisions, how will people learn? Oh, corporate welfare too.</p>
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</p>
<p>I hope you know what you are doing. I suspect a lot of folks will make a lot of money in XLF if bought at the right time and sold at the right time. For me, I couldn’t handle that level of risk. If I bought XLF, that would be enough to cause it to go down. I hope your luck is better than mine.</p>