If Fannie/Freddie Collapse

[Cruisingdad]

So what would happen? I would think buying or selling a house would come to an immediate halt. Would that immediately bleed into other areas? I read that Lehman is not doing well either. I read one analyst saying the word depression. Seems the credit reating of the US would fall along with it.

But do you bail them out? Lehman? Freddie/Fannie? If you were Paul, what would you do? Would you have a choice? If/when it happens, what would the effects be on the economy? Seems Wall Street does not care for the prospect.

- CD

[JohnRPollard]

CD,

From what I've read, the Fannie/Freddie "crisis" is overblown. Every indication is they have abundant liquidity and cash reserves.

The recent panic seems to stem from proposed accounting rules changes which the FASB has circulated only in draft form as yet. If those changes were implemented, they would require Fan/Fred to include on their ledgers certain liabilities that presently are accounted for only "off-balance sheet". Shifting those liabilities to the running ledger would require Fan/Fred to increase their cash reserves in order to maintain a required ratio of assets to liabilities. They would raise this capital by issuing more common shares, which would dilute the value of current shares. So current shareholders are jittery and some are looking to off-load the stock before it gets diluted, hence the sell-off and drop in share price.

The odd thing is that most everyone expects that Fan/Fred will be exempted from the new FASB rules, or at a minimum the requirements imposed will be gradually phased in and thereby mitigate the "shock" to the system.

If you're a bottom feeder, now might be a good time to buy.

[sailhog]

Originally Posted by JohnRPollard

From what I've read, the Fannie/Freddie "crisis" is overblown. Every indication is they have abundant liquidity and cash reserves.

Cap'n Pollard speaks the truth! They own the good stuff as far as mortgages go. Apparently they're undercapitalized ($80 billion, when the industry standard would require them to have $500 billion), but they didn't hand out loans to everybody and anybody. Then again, I just pretend to know what I'm talking about concerning financial matters. Although Cap'n Pollard has shown himself to be a scoundrel on this forum (offering to deliver boats by taking a circum-planetary route when an 80nm rhumb line would do -- just to line his own pocket!), I believe he is telling us the truth in this one particular instance.

[Cruisingdad]

Yeah, well, Capn Pollard told me he bought Fannie at $70/share last year. He said he wanted to rub them off on some poor sailnetter. When he told me this, I refused to allow him to post. This is a board of ethics, after all. THen he said he would split the profits with me. I made sure he was the first poster. Any dissenting opinions will be deleted and the user banned until the shares have sold and the dividends paid.

- CD

PS Hog, we take Mastercard.

[sailhog]

Originally Posted by Cruisingdad

Yeah, well, Capn Pollard told me he bought Fannie at $70/share last year. He said he wanted to rub them off on some poor sailnetter. When he told me this, I refused to allow him to post. This is a board of ethics, after all. THen he said he would split the profits with me. I made sure he was the first poster. Any dissenting opinions will be deleted and the user banned until the shares have sold and the dividends paid.

- CD

PS Hog, we take Mastercard.

Good work, CD! I'm always telling people how venal Cap'n Pollard is, and everybody here's like, "He's really nice once you get to know him, blah, blah, blah..." Well, last week he's trying to pawn off some Lehman Bros. stock on me. Since then it's down 60%... Find another sucker, Cap'n Pollard! Argh! Argh! Argh!

[Cruisingdad]

Originally Posted by sailhog

Good work, CD! I'm always telling people how venal Cap'n Pollard is, and everybody here's like, "He's really nice once you get to know him, blah, blah, blah..." Well, last week he's trying to pawn off some Lehman Bros. stock on me. Since then it's down 60%... Find another sucker, Cap'n Pollard! Argh! Argh! Argh!

Whatcha think I should do to him for his apparent theivery?? Think we should change his avatar to a Sea Ray? Nah. Not harsh enough. Ban him? Nah, that is getting off too easy. Send Gweedo to break a few bones? Nah, bones heal. What lasting and detrimental and scarring punishment should we do?

Ahh, what about make it so that he can only read Sailaway's posts when he logs on? Or is that punishment too harsh?

- CD

[sailhog]

CD,
I suggest that we start a thread entitled: "The top 25 things I hate about Cap'n Pollard," or maybe, "Guess What Pollard Stole from me Today?" or perhaps, "What Makes Pollard's Eyes So Beady?" or, "Why Does Polllard Sit Around the House All Day Thinking up Ways to Destroy Me?"

[JohnRPollard]

Originally Posted by Cruisingdad

Ahh, what about make it so that he can only read Sailaway's posts when he logs on? Or is that punishment too harsh?

- CD

Nothing I've ever said on this forum deserves such a punishment!

Hog, I told you to flip the Lehman Bros, didn't I? Oops, "my bad".

[sailaway21]

How about Lego Pollard receives 1000 shares in CD's cow fart energy firm?

[Zephyr88]

So what happens now in the US?

F & F have just experienced a 50% drop in share value, US govt talking about bailout.... What's effects is this going to have over there for you guys generally?

I understand (I might be wrong) that the whole event is just heard panick, lets just hope it picks up and that would be a sign to the idiots with no brains not to drop everything in a panick.

I can't stand idiots that fall apart in the most crucial/difficult moments, it just gets people hurt for no good reason.