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Thread: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

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    Default well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    I'm absolutely speechless that GWB has relented and now agrees to sign this 'bailout' bill ... of course the Chinese and Japanese are probably providing zero alternatives.



    (snip)"Bush just said he will sign the 'Save the Banks' bill which basically nationalizes mortgage debts so the taxpayers have to pay everyone back if homeowners default. Lovely. The entire mortgage/banking/Wall Street/pirate cove/derivatives monster markets must be somehow saved by the huge entity we call 'The United States Government' which happens to also be going bankrupt! How this is all possible is the real story: it is impossible. But so long as our trade and world dominion rivals keep this going, it will keep on going. This is why I advise watching the Chinese very closely. For they are the ones who can pull the plug on all this.


    Commodities Fall to 7-Week Low as Investors Shun Energy, Metals

    (Bloomberg) -- Commodities dropped to the lowest in seven weeks as a stronger dollar and rising equity markets eroded the appeal of oil, gold and corn as alternative investments.

    The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials fell for a second day, touching 1,527.441, the lowest since June 5. Corn was the biggest loser, dropping as much as 5 percent, and crude oil extended its slide from a record this month, while gold dropped to a two-week low.

    The dollar rose to a four-week high against yen and rose against the euro as investors increased bets the Federal Reserve will raise interest rates in September. The Dow Jones Industrial Average added 3.6 percent last week, while the UBS Bloomberg index plunged 7.3 percent, the biggest slide since March. Some investors buy commodities as a hedge against inflation.



    Now quick: name the two countries that hate high commodity prices the most. The two countries that export virtually no commodities at all at any price. The two biggest manufacturing countries on earth. By now, we all know who these entities are. Just for the fun of it, which two countries on earth have the world's biggest FOREX reserves? Or how about this: which two countries export the most manufactured goods to the United States? Then there is this question: which two countries also hold the biggest US government as well as non-government bonds and debts?

    The answers to these questions are very easy: China and Japan. Online, many commentators pretending to be wise will talk and talk about China doing this and China doing that. But seldom does anyone talk about both China and Japan doing the same things at the same times and having the same results. Until people wrap their brains around this obvious riddle, we will be unable to defeat the Sphinx. She yawns and wonders why everyone is so stupid. Of course, she gets to eat these clueless people. So she is content.

    So....both the frantic Federal Reserve and the Treasury have moved heaven and earth even to the point of tying up all the gnomes and not allowing anymore naked short selling....sort of...ah...a tiny bit....as the government moves against the pirates and tries to pretend we want to stop wild speculation, the simple act of getting Japan to stop giving these guys free loans has finally had an effect. Japan's exporters want the 0.5% lending for themselves but NOT for others who are bidding up the value of raw materials! I read every week in Japanese news complaints about the hike in manufacturing costs. They can't rip the pay of the workers any further. They have to stop the commodity inflation. China is in the same boat.

    The US exports...hold onto your hankies, everyone: RAW MATERIALS. Yes, we import oil and want cheaper oil but the others? Wheat, rice, corn, minerals, wood, you name it: we are heavy exporters. Our trade deficit narrowed the more commodity prices rose! If we imported less oil, we would have balanced our trade deficits!

    Instead, we are so deep in hock to these two Asian rivals, we have to help THEM, not ourselves. Both import a great deal of oil. Both need cheaper oil, badly. But this also makes US exports to them, cheaper. They then add value via labor and ship it all back and we have to pay via IOU.

    The banking rescue at this end has to NEVER lose sight of all this! Yet NO ONE TALKS ABOUT THIS. The connections here are ridiculously strong and equally obvious. Yet, ignored. The helpless US populace thinks that now, inflation will vanish under a rock as we resume the past status quo. THIS IS IMPOSSIBLE! Just like the Goddess of Inflation, aka, Medusa, suddenly flashed into view and turned our economy to stone, she will crawl back under the rocks and continue to grow in power. If we resume turning inflation into red ink rather than paying at the pump, we will simply be signing our collective death warrant. We are being turned into slaves."(snip)


    (snip)"Today, Congress is voting to fix everything with the ruinous Housing Bill. This was demanded by China and Japan. If we didn't do this, they will destroy what is left of our economy by refusing to buy more debts. Japan might try continuing this but China would make this impossible. The US faced bankruptcy this morning and has decided to obey the real rulers.


    RED ALERT RAPE BY CONGRESS!

    But here's the punchline - apparently, last night, The US House and Senate reached at least a "soft" agreement on the Housing Bailout Bill, aka HR 3221.

    THIS BILL MUST NOT PASS.


    Alas, it is too late. No petition from mere US citizens will stop Congress from obeying the Real Rulers who happen to be anyone with lots of money or who run the media. End of story. Everyone sighs with relief because the drunkard, Bush, has announced this hour, he is signing this bill that tacks on unknown obligations to the US government which will be funded by China and Japan as they continue to buy our collective asses."(snip)
    Last edited by Melonie; 07-23-2008 at 03:52 PM.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Bailout doesn't equal nationalization. Do you have links to factual data that China and Japan demanded 'this'.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    the point was not that the GSE's themselves have been nationalized, but that their DEBTS have been nationalized ! To the US taxpayer, and to the credit rating of the USA, the result will be the same.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    The 'bailout' amount is not enough to 'nationalize' their debts.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Gee stupid me.

    I have been dumb enough to have been paying my mortgage every month, and paying extra as well so that I will be done paying in a year.

    If I had been "smart" when I RE-FI'd twice to get better interest rates and shorter time span I should have stuck with 30 years took out all the equity I could have, quit paying last month when my ARM reset and let the government come and save me from myself.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Quote Originally Posted by phonehome View Post
    Gee stupid me.

    I have been dumb enough to have been paying my mortgage every month, and paying extra as well so that I will be done paying in a year.

    If I had been "smart" when I RE-FI'd twice to get better interest rates and shorter time span I should have stuck with 30 years took out all the equity I could have, quit paying last month when my ARM reset and let the government come and save me from myself.

    What were you thinking.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    But who really gets bailed out: a home owner or the foreign FRE and FNM bond holders? That's the question...

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    It sure won't be the home owner.

    They will be left paying for an overpriced house with over priced taxes. The others will be soaked for fees and high interest on any credit they try to get because of a quarter million or more default on their credit report. Welching on a quarter million plus makes an impression.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Stockholders will only see a valuation on the stock. The bailout is supposed to refinance some homes at fixed rates, some for buying foreclosed homes and having someone redevelop it, and such.

    The 25bill is actually divided among half a dozen, or so, different programs.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    The 'bailout' amount is not enough to 'nationalize' their debts.
    well, for starters, 100 experts will tell you that the $25 billion is merely the first installment on a gov't guarantee that could run into the hundreds of billions.

    Second, the 'bailout' budget does not take into consideration the possibilities that mortgage bonds already pledged by FNM and FRE as collateral for Fed discount window loans may also drop in value, sticking the US taxpayer with the shortfall.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    And another 100 experts will tell you it's not.

    FMac and FMae are not guaranteed by the government.

    If you mean the 25bill is the first payment on a govt guaranteed bailout, we will see.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    If you mean the 25bill is the first payment on a govt guaranteed bailout, we will see.
    Yes this is exactly what I'm referring to. Washington has opened 'Pandora's Box' by stepping up to the plate with 25 billion in US taxpayer money to backstop Fannie and Freddie. This establishes an important precedent in the minds of foreign investors. And even though the US congress was unwilling to sign a 'blank check' for Sec. Paulsen re Fannie/Freddie bailouts, you have to understand that the US gov't now has little choice but to keep making future cash infusions if it wishes to avoid larger and even more disruptive future 'dumps' of FNM and FRE bonds / shares by those foreign investors.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    and it appears that this bill will be law by monday ...



    there's also a whole lot of 'fine print' features in this bill ... much of it 'pork' for big cities. I'm sure the details will be out on monday.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    So if we have a market rally on the news about the bailout, the foreigners will use it as an opportunity to get out of the US assets, while Joe will get stuck with the crappy paper? Or has Joe wisen up by now?

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Quote Originally Posted by Melonie View Post

    Now quick: name the two countries that hate high commodity prices the most. The two countries that export virtually no commodities at all at any price. The two biggest manufacturing countries on earth.
    The United States is the biggest manufacturing country on earth. The United States global share of global manufacturing output is approximately 22%, compared to approximately 17.8% for Japan and 8% for China. See Myth #2 on the page below:

    http://www.uschina.org/public/docume...hina-Trade.pdf

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Quote Originally Posted by Melonie View Post
    and it appears that this bill will be law by monday ...



    there's also a whole lot of 'fine print' features in this bill ... much of it 'pork' for big cities. I'm sure the details will be out on monday.
    Yea, one always hears about this stuff AFTER the bill is passed.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    Quote Originally Posted by eagle2 View Post
    The United States is the biggest manufacturing country on earth. The United States global share of global manufacturing output is approximately 22%, compared to approximately 17.8% for Japan and 8% for China. See Myth #2 on the page below:
    Doesn't mean manufacturing is being eliminated in the US.



    Myth: Manufacturing’s share of the economy has been relatively steady over time.



    Fact: Manufacturing’s share of the economy has been falling since the early 1950s. Moreover, the decline over the past decade hasn’t been any steeper than in the past.



    Projection: At this rate, manufacturing drops below 10% of the economy by 2013.

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    Default Re: well it's going to happen - 'Congress Nationalizes Mortgage Debts'

    So if we have a market rally on the news about the bailout, the foreigners will use it as an opportunity to get out of the US assets, while Joe will get stuck with the crappy paper? Or has Joe wisen up by now?
    well, in one probable scenario Joe Sixpack doesn't get a choice. If you are correct - that the bill's passage results in a rally in the price of FNM and FRE shares - which provides a perfect opportunity for foreign holders of those shares to 'get out while the getting is good' - FNM and FRE shares will soon start falling back to levels that realistically reflect the 'loss risk' and/or (negative) profitability. The Treasury is already on record as having established the authority to use US taxpayer money to directly purchase FNM and FRE shares in order to support the share price ! Once that happens (and it's pretty likely that it will) Joe Sixpack becomes both an involuntary owner of FNM and FRE stock, as well as an involuntary 'cosigner' for Fed discount window loans made to FNM and FRE based on 'toilet paper' mortgage bonds being posted as collateral.

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