CLAW BACK BANKSTER PAY

Taibbi is talking about this today.

Waxman didn’t know much about the Fannie and Freddie deal.

The Treasury completely changes the rules for Fanniie and Freddie in a last minute change hidden in the Christmas holiday. A change that puts the taxpayer into the position of permanent backstop for all future losses. A change based on backdoors put into the original legislation and a committee chairman vying for the some part of the same pot of money didn’t read about it or ask questions later.

Words fail.

How could Waxman not know this was taking place?

Just a little Christmas surprise. A stocking stuffer. s/

I read that as he didn’t know much about how the decision was made. All we know is what was put out in the press release. I don’t imagine many folks outside of the inner circle had any inkling of what was being decided, or even who was really involved in the decision making process.

We’ve renamed Fannie/Freddie to be Frantic May/Frivolous Mac in Bailout The Game: http://www.bailoutthegame.com

So, now that we have effectively and in deed nationalized Freddie and Fannie, let’s do in name also.

And, while we are at it let’s make a list of all ‘too big to fail’ institutions and cut them down to size, and let’s also revisit antitrust provisions and start breaking up monopolies.

Blue Texan’s regularly scheduled post is ready: “Dear Right-Wing Bedwetters: George H.W. Bush Sought to Try Lockerbie Terrorists in US Court”

The decision was technically solely the Treasury’s to make, the way the legislation was written. Whether Obama was in on the decision, as he almost certainly was, the number of players had to be fairly small in order to spring it as a Christmas surprise. Various people, including Jane, wrote about the dangers around this loophole expiring. Some wrote about the potential problem when TARP was first being tossed around. Since, by law, the Congress is responsible for revenues something this big should have generated far more interest than it did. On the face, Waxman’s response seems more like plausible deniability than a proper explanation of why he hadn’t really thought about it much.

Geez, Jane knew it was coming.

I predict a “strongly worded letter” coming out of Waxman’s office.

Financial reforms are long overdue. And the mega-banks had to be stabilized, they are too interconnected in the financial system we are all dependent on. After they are well, they should be broken up into smaller pieces so this cannot happen again — saw a cool site; Balkingpoints ; incredible satellite view of earth

Jane’s got better sources than a lot of congress critters. *g* He prolly wasn’t paying a lot of attention to it. Could be he was just being coy with his response. Who knows. I don’t have much confidence in any of them nor do I think they have a good grasp of all the shit that floats through that place.

If we really nationalized them we’d have at least two problems.

First, the people running it would have to accept federal government wages. Which of course would eliminate their ability to innovate and in turn might make them more profitable. Couldn’t have that.

Second there are probably massive urecognized losses among Fannie and Freddie mortgages over that last few years, including 2009, that a real audit would catch. Since a real audit would completely change the mortgage market, because F & F would have to explain why are still making bad loans, this is probably never going to happen. Better to “sell” the dreck to the Treasury and Fed and hope that it all is forgotten.

Taibbi’s piece points to wing-nuttia as a ‘crosspartisan’ phenomenon.

Good to cut and paste for Obamapologists and kossaks as he presents projection in mind boggling action.

The ‘leave Obama alooooooooone’ mindset, needs to be disabused of it’s sense of legitimacy, the sooner the better.

Extremely frightening.

What’s even more troubling about this is that Fannie and Freddie are given the imprimatur of being a government entity when they’re not

I don’t even begin to understand what Waxman is trying to say there.

So, now that we have effectively and in deed nationalized Freddie and Fannie, let’s do in name also.

That could be said about everything from AIG, Citi, to the auto industry. I am still trying to work through in my mind what all of the implications of this will be.

The Obama Administration has never given a shit about homeowners so I think we can safely assume this wasn’t done for them. Fannie and Freddie already are essentially the current home market in the US. So I don’t see how this would change that. At this point, I usually go back to the banks. Is this a scheme to dump the banks’ toxic sludge on the Fed’s books off on to Fannie and Freddie? Is it in response to the rising number of foreclosures, the creation of an ultimate bagholder for any defaults on the securities the GSEs processed, to be paid out, as in the AIG case, at par?

Meant to answer this earlier using the patterns derived from one of the most brilliant approaches ever – “Leave No Child Behind”.

1. He is stupid.
2. He is incompetent.
3. All of the above.

Yes it is.

Taibbi:

“What worries me is that we’re now reverting to the same old pattern with the financial crisis story. We’re starting to see fault lines develop, where one side blames the government while another side blames Wall Street for the messes of the last two decades. The side blaming the government tends to belong to the free-marketeer class and divines in safety-net purveyors like the GSEs and in the Fed’s money-printing fundamental corruptions of the capitalist ideal, while the side blaming the bankers tends to belong to the left-liberal tradition that focuses on greed and seeming absence of community conscience among the CEO class as primary corruptors of the social contract.”

Washington and Wall Street and wing nuts for each side effectively splitting the two into nonexistent separate camps is the means by which this hoax is being given license to exist.

The Left needs to ridicule, shame, and take to task all the mechanical, unthinking, partisan cheerleaders on the left of the right, wherever the fuck that is.

Left / Right as a frame to begin with is absolutely not a useful compass !

We need change, we need direction, organization, and a unifying common goal, around which to grow a movement.

Well, there’s an expectation that this whole Ponzi scheme will crash and burn at some point inside this year. Even Stieglitz and Krugman say it in econospeak oraceleese. So, we’re just being given front seats to an enigmatic but super avant garde performance, the meaning of which we’ll understand after all will have already been said and done…

Oh, wasn’t that what some Bush prick said about them creating reality which we study to understand, while they keep ahead creating new ones, etc.

Or (4) they deliberately didn’t tell him about it, knowing what kind of reaction they’d get.

At least two things. The Treasury is ending its mortgage-backed security purchase program as of Dec. 31, after about $220 billion in purchases.

The hampupdate.pdf includes new provisions that effectively backdate rules for HAMP.

HAMP was updated on November 30, 2009 to include HAFA which kicks in on April 5, 2010. HAFA includes provisions for requiring short sales and deed-in-lieu-of-foreclosure. This, in conjunction with the foreclosure power in HAMP will almost certainly put a lot of foreclosures on the market. Which will almost certainly drive down repossession resale prices which will lead to greater losses for REO mortgage holders. Fannie and Freddie.

The beauty of Taibbi’s writing is his ability to convert, otherwise opaque and ‘elite’ information, into a dish most every lay person can partake of.

So, could i tempt you to predigest it (even more), for the uninitiated amongst us, so we can figure out if we should hate them – whomever the ‘they’ are?!

thanks, tf.

I’m not against it but doing that in general but it would probably be outside of the scope of this kind of dialog.

Has for the “they” in this circumstance and who to dislike – well that really is tricky. I’m not actually believer in markets as they are currently practiced but I do want to understand what people are doing and try to figure out motivations. My values tint my description. All the more so when writing a lot of sentences can lead to people skipping to the next quick thing.

One thing is fairly certain. If the HAFA provisions in HAMP go forward as currently written there will be a lot of houses going into foreclosure after April 5th. From the viewpoint of the person who gets involved with HAMP that is almost certainly not a good thing. HAMP already allows quick foreclosures, as a part of entering into the attempted refinance agreement, that allow for the mortgage holder to foreclose whenever the holder thinks the new agreement isn’t working. No appeal. No right to defend. The mortgage holder pretty much doesn’t have to do anything but tell the ex-homeowner to move.

HAMP and HAFA were created by the Treasury, openly supported by Obama, and offer no incentives for the mortgage holder to reduce the principle. Without reductions in the principle the borrower is simply a debt slave as far as I can tell. Of course, outside of Fannie and Freddie there really isn’t any way to reduce the principle for mortgages that have been packaged up anyway so a blanket rule wouldn’t work.

For HAMP and HAFA the only public author is the Treasury. If you think HAMP and now HAFA is a bad thing, and I do, then Geithner’s crew is to blame.

Thanks, bunches!

Geithner works for Obama; Obama is the leader of the Democratic party, the Democratic party resides comfortably in the pockets of K street. Hopey Changey is no a policy, it’s about as cheap and recycled a slogan as there has ever been. Still, the American people persist in the conviction that our team will make our owners proud.

The indomitable human spirit (an endless capacity for abuse) is the key to our permanent state of misery, it seems.

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I don’t understand how this “guarantee” for Fannie & Freddie can apparently be done “off budget” [particularly during a time of budget pearl-clutching].

I mean, the usual MO is that the various departments [HUD, HHS, DOD etc.] come up with a “budget,” said “budget” is reviewed and voted on.

How can Fannie & Freddie stroll on over to the Treasury window and open a tab? Treasury seems to be saying “just send us the bill and we’ll pay it”.

I’d like a review of just what was in those three pages Paulson presented as “all that was needed” for the TARP bailout.

Fannie and Freddie. No, more like Frantic May and Friviolous Mac because they are frantically and frivolously spending our hard earned taxpayer dollars. We included them in our game Bailout: http://www.bailoutthegame.com