OMG congress needs to approve this bailout plan NOW. i swear that if this deal doesn't go through, the US is screwed. it'll be over. i am not entirely exaggerating when i say that streets will be slick with blood, babies will be devoured, and i will be forced to sleep with a machete under my pillow.
this isn't something that should be delayed. i know people are pissed at wall st. (and at all the regulators b/c it's fair to blame the police for the actions of the criminals, right? note that the regulators didn't cook up this fannie mae debacle), but we're beyond the point of no return. there's nothing good in store for us, but we can limit the damage by acting quickly. the markets overreact and lunge irrationally even based on minor news. with the dire fate of the US looming over us, delay = drop in confidence. we can't afford to let the markets plummet more than before. our economy will tank so no one will lend to us since we can't pay them back, all the liquidity that is the lifeblood of our banks will dry up, interest rates will go through the roof, the value of the dollar will be utterly destroyed, and we're going to have to take a long hard look at our lifestyles and do some reevaluating of our finances. it's not just people on wall st. who will be affected. any american who has to work to get by will suffer.
no more filibustering blabber. congress can bitch about this some other time. right now this has to go through. and right now i need to hide out on a deserted island with a cooler of beer and a PS3 and pretend none of this ever happened.
i leave you with an interesting article from NYT, 1999:
September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market." ...
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
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ok instead i will leave you with lighter news: http://dlisted.com/node/28465.
Posted by L at September 26, 2008 06:27 PM