Comments on: The Fate of Fannie and Freddie http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/ Seattle's Leading Resource for Real Estate Information Fri, 19 Mar 2010 23:12:07 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: What Drives an Active Online Community? | Seattle Real Estate ~ Rain City Guide http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-322614 What Drives an Active Online Community? | Seattle Real Estate ~ Rain City Guide Wed, 30 Jul 2008 22:26:17 +0000 http://raincityguide.com/?p=2013#comment-322614 [...] The Fate of Fannie and Freddie by Rhonda [...] [...] The Fate of Fannie and Freddie by Rhonda [...]

]]> By: Eleua http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321617 Eleua Mon, 14 Jul 2008 16:19:44 +0000 http://raincityguide.com/?p=2013#comment-321617 Sniglet, Your theory is correct if you are discussing the short end of the Treasury curve. The long end of the curve is going to be the short of a lifetime when this gets rockin' and rollin'. Flight to safety is only for the short term debt. I look at 30 and 91 day debt. www.treasurydirect.gov Sniglet,

Your theory is correct if you are discussing the short end of the Treasury curve. The long end of the curve is going to be the short of a lifetime when this gets rockin’ and rollin’.

Flight to safety is only for the short term debt. I look at 30 and 91 day debt.

http://www.treasurydirect.gov

]]> By: Kary L. Krismer http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321603 Kary L. Krismer Mon, 14 Jul 2008 14:46:52 +0000 http://raincityguide.com/?p=2013#comment-321603 These things are not government bonds (at this point). These things are not government bonds (at this point).

]]> By: Rhonda Porter http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321584 Rhonda Porter Mon, 14 Jul 2008 06:41:11 +0000 http://raincityguide.com/?p=2013#comment-321584 I keep thinking of my out-laws (what my ex-inlaws fondly refer to each other--really!) who JUST retired. I keep thinking of my out-laws (what my ex-inlaws fondly refer to each other–really!) who JUST retired.

]]> By: Sniglet http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321581 Sniglet Mon, 14 Jul 2008 05:33:54 +0000 http://raincityguide.com/?p=2013#comment-321581 Eleua said: "The .gov can’t throw a huge auction out there on their long term debt, or it might find out that nobody wants it at these rates. That kind of price discovery is not what they need" Actually, I suspect that there might be surprisingly robust demand for US treasuries (both the long and short variety). Believe it or not but treasuries are percieved as being one of the safest places to park money these days. Heck, with banks like IndyMac failing who wants to put their money in term deposits anymore? My guess is that the demand for T-bills will be very strong for quite a while, keeping interest rates really low. Not that this will help much. The rates on all other forms of debt will continue to widen regardless. Just because there are low T-bill rates doesn't mean it will be cheap for either businesses or consumers to get loans. Eleua said: “The .gov can’t throw a huge auction out there on their long term debt, or it might find out that nobody wants it at these rates. That kind of price discovery is not what they need”

Actually, I suspect that there might be surprisingly robust demand for US treasuries (both the long and short variety). Believe it or not but treasuries are percieved as being one of the safest places to park money these days. Heck, with banks like IndyMac failing who wants to put their money in term deposits anymore?

My guess is that the demand for T-bills will be very strong for quite a while, keeping interest rates really low. Not that this will help much. The rates on all other forms of debt will continue to widen regardless. Just because there are low T-bill rates doesn’t mean it will be cheap for either businesses or consumers to get loans.

]]> By: Eleua http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321579 Eleua Mon, 14 Jul 2008 05:19:01 +0000 http://raincityguide.com/?p=2013#comment-321579 To me, nothing screams "our banking system is sound and well capitalized" like the .gov going from crisis to crisis throwing money at the lynchpins of the US banking system. If this was a Hollywood production, it would be funny. Unfortunately... To me, nothing screams “our banking system is sound and well capitalized” like the .gov going from crisis to crisis throwing money at the lynchpins of the US banking system.

If this was a Hollywood production, it would be funny. Unfortunately…

]]> By: Eleua http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321577 Eleua Mon, 14 Jul 2008 05:14:46 +0000 http://raincityguide.com/?p=2013#comment-321577 KLK, 3 and 6 month bonds? The .gov can't throw a huge auction out there on their long term debt, or it might find out that nobody wants it at these rates. That kind of price discovery is not what they need Also, 3-6month money is easier to sell. My guess is Skeletor is calling in favors from the IBs so this gets fully subscribed. They will do the same crap in another 13 and 26 weeks. Lather, rinse, repeat. If you are a cynic, then look at the calendar and see what is 3 to 6 months down the road. Kick the can... KLK,

3 and 6 month bonds?

The .gov can’t throw a huge auction out there on their long term debt, or it might find out that nobody wants it at these rates. That kind of price discovery is not what they need

Also, 3-6month money is easier to sell. My guess is Skeletor is calling in favors from the IBs so this gets fully subscribed. They will do the same crap in another 13 and 26 weeks. Lather, rinse, repeat.

If you are a cynic, then look at the calendar and see what is 3 to 6 months down the road.

Kick the can…

]]> By: biliruben http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321573 biliruben Mon, 14 Jul 2008 04:39:25 +0000 http://raincityguide.com/?p=2013#comment-321573 Uh huh. Color me worried. Uh huh. Color me worried.

]]> By: Tim http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321569 Tim Mon, 14 Jul 2008 03:17:01 +0000 http://raincityguide.com/?p=2013#comment-321569 Bili- Regarding your 117 post... Astonishing isnt' it. Bili-

Regarding your 117 post…

Astonishing isnt’ it.

]]> By: The First in a Series of Fannie and Freddie Bailouts | Seattle Real Estate ~ Rain City Guide http://raincityguide.com/2008/07/11/the-fate-of-fannie-and-freddie/#comment-321568 The First in a Series of Fannie and Freddie Bailouts | Seattle Real Estate ~ Rain City Guide Mon, 14 Jul 2008 02:56:13 +0000 http://raincityguide.com/?p=2013#comment-321568 [...] Sniglet asks an interesting question (comment 123): “So what happens to the shareholders? Do any of these plans ensure that there is no dilution of equity if any form of bail-out were to occur? If the GSE shareholders aren’t protected then we could see a complete abandonment of the financial system by investors. Who will want to buy shares in financial firms if the government isn’t going to ensure their investments remain safe?” [...] [...] Sniglet asks an interesting question (comment 123): “So what happens to the shareholders? Do any of these plans ensure that there is no dilution of equity if any form of bail-out were to occur? If the GSE shareholders aren’t protected then we could see a complete abandonment of the financial system by investors. Who will want to buy shares in financial firms if the government isn’t going to ensure their investments remain safe?” [...]

]]>