The Fannie Mae and Freddie Mac Takeover: Day 3

By: Francis Cianfrocca (Diary)  |  September 9th at 09:42 AM  | 

I’m going to get into three things with you this morning. First, I’d like to address the issues raised by many respected people, in regard to the suppression of private interests by an agency of government. To do this, I’m going to fill in some of the history of Fannie and Freddie. Second, I’ll give more detail on the exact terms of the Treasury takeover | Read More »

Interpreting the Nationalization of Fannie Mae and Freddie Mac

By: Francis Cianfrocca (Diary)  |  September 8th at 07:33 AM  | 

There are two points I want to make to you this morning, as the impact of yesterday’s nationalization of the mortgage GSEs works its way through the system. Here’s more information. First: while this is most definitely a fundamental change in the structure of the mortgage markets, it is not a change in our government’s existing policy of deep intervention in housing. The people who | Read More »

Fannie Mae and Freddie Mac Have Been Taken Over By The Treasury: Analysis of the Press Release

By: Francis Cianfrocca (Diary)  |  September 7th at 12:41 PM  | 

At 11AM Eastern Time on Sunday, September 07, 2008, the Treasury Department released the text of a joint statement regarding the GSEs, Fannie Mae and Freddie Mac. The statement contains remarks by Treasury Secretary Henry Paulson, and Director James Lockhart of the newly-chartered Federal Housing Finance Agency. (The FHFA now has regulatory oversight over the GSEs.) As expected, the GSEs will enter government conservatorship (which | Read More »

Fannie Mae/Freddie Mac Death Watch

By: Francis Cianfrocca (Diary)  |  September 6th at 08:47 AM  | 

About two weeks ago, I wrote in this space that some very large tectonic plates were starting to move far below sea level in the financial world. That was based on some unusual patterns I was seeing in the overnight repo and money markets. I guessed (but had no information to confirm) that whatever was in the breeze had something to do with Fannie Mae | Read More »

Financial Markets This Week

By: Francis Cianfrocca (Diary)  |  August 25th at 07:46 AM  | 

Markets will be very, very quiet until next week as everyone finishes up his vacation. Inside the quiet backdrop, there was a lot of weekend chatter about the money markets, which continue to be essentially non-functional after more than a year. It’s impossible to imagine anything that will unfreeze interbank lending, especially in London. This is going to be a boot planted on the neck | Read More »

Handicapping the Fannie Mae/Freddie Mac Situation

By: Francis Cianfrocca (Diary)  |  July 21st at 08:19 AM  | 

In the financial markets, last week was the wildest and most dramatic one since the Bear Stearns Companies collapsed last March. The subject was whether we would see a collapse of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own or guarantee $5.3 trillion in US home mortgages. And by extension, the fear spread to the entire US financial sector. The popular | Read More »

Replacing Housing Risk With Dollar Risk, Updated

By: Francis Cianfrocca (Diary)  |  July 17th at 08:12 AM  | 

As of Sunday night, the US government, speaking through Treasury Secretary Henry Paulson, has committed to guarantee the value of securities issued by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. That means that you, dear Taxpayer, are about to get into the housing business in a way you’ve probably never imagined and certainly didn’t choose. So it’s worth asking a few questions about | Read More »

Replacing Housing Risk With Dollar Risk

By: Francis Cianfrocca (Diary)  |  July 15th at 07:16 AM  | 

As of Sunday night, the US government, speaking through Treasury Secretary Henry Paulson, has committed to guarantee the value of securities issued by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. That means that you, dear Taxpayer, are about to get into the housing business in a way you’ve probably never imagined and certainly didn’t choose. So it’s worth asking a few questions about | Read More »

If It’s Sunday Evening in New York, It’s Monday Morning in Tokyo

By: Francis Cianfrocca (Diary)  |  July 13th at 05:53 PM  | 

Update: 9:40am EDT, 14Jul08: Overseas markets reacted well to the Paulson “we have a plan” statement. Asian markets ended lower on regional concerns while Euro markets are somewhat higher. The US stock market has opened up over 100 points, while the US Treasury market is only slightly lower. FNM and FRE stock were both up about 20% in pre-market trading, while their bonds, swaps, and | Read More »

Rethinking the Goals of a National Mortgage Bailout

By: Francis Cianfrocca (Diary)  |  July 11th at 09:16 AM  | 

Front and center this week have been the ill fortunes of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own trillions of dollars’ worth of US home mortgages. At this point in time, there really is no reason to own the stock of either company. The Administration is said to be looking carefully at whether and how to do a government takeover | Read More »