Fanny and Freddie Bailout opinions

M

MortgageMan

Guest
I have read alot about each different opinions on the bailouts that have taken place recently. What are your thoughts on this specific bailout? Will this help us in the long run, short term, overall, etc? I have my opinion, but I feel that it may be somewhat biased because of my line of work. I am not looking for an argument just an educated discussion on this topic. What are your thoughts?
 
I have never posted to this forum, but have had some thoughts about the past few weeks and the financial markets. I deal somewhat with the economy and keep a lot of interst. I don't pretend to fully understand the impact. However, I do believe that 99% of us do not have appreciation for what has been happening. Personally, I believe that the bail outs, especially yesterdays bailout of AIG is one of the most significant things to happen since the great depression, I am not sure the government had any choice. If they had not made these bailouts, we could have had a catastrophic collapse in the finincial markets. I am not one for bailing out anyone for thier mistakes and it drives me nuts that everyone expects to be bailed out or have you house rebuilt without consequences. I am concerned about the Federal government now owning a huge % of the mortgages and bank credit. Personally I hope they can again turn it back to the private sector.

If the economy survives the next few months relatively unscathed, it bothers me that very few will recognize what this administration has accomplished to keep the economy alive for what we have gone through since 2001. We could have a complete collapse after 9/11, who would have dreamed that we could survive oil at current levels, and now avoiding almost daily disasters in the financial markets. Whatever your view on the Bush administration on many issues, his administration has gone though a lot of economic crises.
 
That's right, Mr. GW and his admin. have gone through some tough times and he is making it through like a Champ. Too bad for the decision on going into Iraq though. That one kinda left him with a black eye. The big question: would the money spent in Iraq be making a difference in our economy right now?
 
In order to say you've come through like a champ it would first have to be assumed you did something right, the fact GW and this administration haven't been hung is amazing, but is not a sign of success.

The melt down is due in a large part to failure of leadership and since GW was patting himself on the back a couple years ago on the economy I'd say he desreves a kick in the butt today. BUT , it's by no means all his fault, it's the fault of many factors within and outside of our control even our own. would the money we've wasted in Iraq have helped? without a doubt it would, a few hundred billion here and there adds up to real money after a while. the national debt is huge and the bail outs will make it even worse by a huge amount, this is my major concern. AIG had to be saved, I don't see any way around that one bacause they were in too many places and too big to fail. the rest of them should have found their own way or died in my opinion, invest like an idiot and lose like an idiot. on the flip side the dollar is going to be worth about as much as a peso, that's good when you're a farmer selling exports, and more dollars to buy a barrel of oil makes biofuels more cost effective so it ain't all bad.

what matters most is a quick and painless fix to most folks and that's what we're going to shoot for, your kids can deal with trying to borrow the money from China and Russia to stay a float that's not our problem. live for today, that's the cause of our problems and the solution as well.
 
I am not a fan of the government bailing out private companies at all. It goes against every rule of capitalism. Having said that, I do think this particular bail out was necessary to ensure the stability of our economy. Fannie and Freddie account for a huge, no, massive part of mortgage loans.

Without them, I am afraid that their failure would have crippled the economy. Those with perfect credit couldn't refinance or buy a house without paying a huge amount of FHA upfront mortgage insurance. Please keep in mind, when we are talking of Fannie and Freddie we are not talking about "sub-prime" mortgage loans. Fannie and Freddie only take the cream of the cream.

Fannie Mae was created by congress during the great depression to help people qualify for home ownership. Freddie, I believe, wasn't created until the 1970's and was meant to create a competitive market between the two. In order for us to have a stable economy we have to have good financial roots in place. It starts with credit, credit for homes, cars, goods, etc. We cannot let credit get out of hand again. Without the government bailing out these two entities the rest of the credit industry would be in shambles (even more so).

I am not for a long term government take over of Fannie and Freddie. The government can screw this up even more than it is now. I don't care if it's a GOP or DEM either. I believe that this needs to be privatized as quickly as possible and that the two companies need to be broken up into several smaller companies. We cannot afford to put all of our eggs in one or two baskets again.

We could go on and on about the blame game. The fact of the matter is that these two companies haven't changed their lending guidelines in years, so to blame one administration is IMO completely baseless.
 
I don't have much time to post everything I think about this right now, so I'll just say that if the Government hadn't intervened in the Fannie/Freddie debacles and AIG, I think a lot of people would think that anything that may have happened in Iraq, or any other issue, wouldn't mean a whole lot compared to what would happen to the U.S. and world financial systems.
The Federal gov't had no choice in these bailouts, the consequences of not doing so would have been too catastrophic.

As for blaming someone; H'dude, get off it. There is a ton of blame that can be layed on goverment with this one, but 99% of it deserves to be directed toward congress and the previous administration. I say that coming from someone who's worked in Real Estate finance since 1992.
 
Lone_hunter I enjoyed your post until the last half of your last sentence. It's Republican de-regulation, stop making excuses for Bush. Lone_Hunter welcome, feel free to chime in any time.:)

Mortgageman, first you want opinions then you note within your own thread let's not play the "blame game". So what is it? Do you want my opinion or do you want your opinion?

Again, here comes great Bush defender...CAelknuts. Along with another plea to not play the "blame game" but easily points the finger at Clinton. I ask you, how pathetic is that, to contradict yourself within 2 sentences.

Read it and weep my little bushies! REPUBLICAN FAULT, BUSH''S FAULT, MCCAIN & GRAHAM, read all about it, then research it.

http://www.nowpublic.com/world/mccains-good-buddy-gramm-architect-deregulation-wall-street-0

Mortgageman there is a term for a type of government that supports corporate welfare. Capitalism is not that word, is it?
It's not just Freddie, Fannie, we now have the U.S. taxpayer dabbling into Bear, AIG, and possibly the top 3 U.S. automakers in the near future.

People act like this comes as some type of shock. Both FM's have been a subject of possible failure for several years. Yet, their CEO's and top execs reaped in millions in bonuses. Congress has also already gambled and lost by allowing both FM's to raise their holding ceilings. Detractor have been predicting this days arrival for years.

Mortgagman as you well know due to deregulation there was an over abundance of many shady qualifying schemes, rubber stamping of mortgages, and laxed credit standards. You are in the business, so the reality of financial collapse after all the "Shenanigans" should really come as no surprise.

In an atmosphere of deregulation, the mortage, real estate, construction, banking industries, along with city, county, and state coffers were getting filled. Everybody was making money hand over fist and the President loved hyping record home ownership at every turn.

Should the CEO or the executive staff of either FM's or AIG receive their parachutes?????

I know why you want to see it privatized quickly, so it can be classified as a "necessary measure". If it is not privatized quickly we can classify our entire economy as something other than capitalism.

Every great depression has come from cheap money and land grabs. The Bush Administration should have seen this train a coming back in 2003, instead of pimping the stump over the record amounts of home ownership.

Better pray nothing else happens, you are seeing the last measures of preventing what I think in the end is the inevitable. This whole bailout including AIG, opens a whole new can of worms, we as taxpayers don't even know about....yet.
 
Look back on this forum a few years ago with the threads giving Bush all the credit for the thriving economy, even Bush was bragging, now none of this is his fault? get real.

It's not ALL Bush's fault nobody is saying it is, but if you'll recall we're in an election year and the "Mavericks" are claiming they can fix this mess, therefore ties to Bush who helped get us here are very relevant. you don't care for connecting the economy to Bush and your Mavericks? I understand 100%.

Action had to be taken, I'm just not sure it needed to be as painless as they're trying to make it.
 
>Mortgageman, first you want opinions then
>you note within your own
>thread let's not play the
>"blame game". So what is
>it? Do you want my
>opinion or do you want
>your opinion?


You are correct I asked for opinions on the bailout. Where in my post did I ask about what person or administration got us to this point? OPINIONS ON THE BAIL OUT, LONG TERM AND SHORT TERM. It's actually pretty simple if you just read it. Was it really that difficult for you to understand?



>Again, here comes great Bush defender...CAelknuts.
>Along with another plea to
>not play the "blame game"
>but easily points the finger
>at Clinton. I ask you,
>how pathetic is that, to
>contradict yourself within 2 sentences.

Please show me where I contradicted myself. I asked for opinions on the bail out in the long term and short term. (I guess I need to put it in triplicate for liberals that don't or won't even read the original post)



>Mortgageman there is a term for
>a type of government that
>supports corporate welfare. Capitalism is
>not that word, is it?


Have you read anything thus far in this thread? Serious



>It's not just Freddie, Fannie, we
>now have the U.S. taxpayer
>dabbling into Bear, AIG, and
>possibly the top 3 U.S.
>automakers in the near future.


Once again you are way off track. I asked about Fannie and Freddie. Is it too difficult for you to address just these issues? Concentrate, please?



>People act like this comes as
>some type of shock. Both
>FM's have been a subject
>of possible failure for several
>years. Yet, their CEO's and
>top execs reaped in millions
>in bonuses. Congress has also
>already gambled and lost by
>allowing both FM's to raise
>their holding ceilings. Detractor have
>been predicting this days arrival
>for years.


FINALLY you start addressing the initial post. Thank you!





>Mortgagman as you well know due
>to deregulation there was an
>over abundance of many shady
>qualifying schemes, rubber stamping of
>mortgages, and laxed credit standards.
>You are in the business,
>so the reality of financial
>collapse after all the "Shenanigans"
>should really come as no
>surprise.


Please tell me if I am surprised enlightened one.



>In an atmosphere of deregulation, the
>mortage, real estate, construction, banking
>industries, along with city, county,
>and state coffers were getting
>filled. Everybody was making money
>hand over fist and the
>President loved hyping record home
>ownership at every turn.
>Should the CEO or the executive
>staff of either FM's or
>AIG receive their parachutes?????


You're back on track....Good Boy!!



>I know why you want to
>see it privatized quickly, so
>it can be classified as
>a "necessary measure". If it
>is not privatized quickly we
>can classify our entire economy
>as something other than capitalism.


I have no faith in government running the mortgage industry.



>Better pray nothing else happens, you
>are seeing the last measures
>of preventing what I think
>in the end is the
>inevitable. This whole bailout including
>AIG, opens a whole new
>can of worms, we as
>taxpayers don't even know about....yet.



Besides getting off track for 95% of your post it wasn't bad.

Here's something you should look at while you play the blame game.

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

Do you really think that Obama (FNMA & FHLMC 2nd biggest investment of lobby funds) has the peoples best interest at heart? If he saw this coming why hasn't he pushed for change in the mortgage industry? Why has he taken so much money from Fannie and Freddie and done nothing? I'm sorry but what your boy preaches and what he actually does are two different things.
 
It's ironic and classic and tragic and typical of liberals all at the same time. Let's see what we have here. we have a pres. nominee in O'Bummer bitching and whining and crying that we've got to reign in these corporate CEO's and their outlandish salaries and perks and stock options. Who does he hire to help him on his campaign? - one Jim Johnson ex CEO & Vice Chaiman of FannieMae and managing director at Lehman Brothers, who stole untold millions from those companies he helped sink. Who else do we have here one - Franklin Raines CEO of Fannie Mae for six years from 1998-2004 in which he was compensated 91.1 million dollars for his contribution to its destruction. We have another ex Fannie CEO Daniel Mudd & Freddie CEO Richard Syron who were also compensated in millions and millions from their contribution to their respective companies destruction. In addition their are untold other executives from these pathetic outfits that have profited wildly for their efforts in creating our economic crisis. Seems to me these mortgage lending companies existed solely for the benefit of these pathetic liberal democratic dirtball Washinton insiders. I wouldn't mind their extravagant lavish salaries and compensation packages if they knew what the hell they were doing and actually did anyone any good or made a profit for their company and actually earned their paycheck. What a freakin joke
 
Yes wet and who is the second largest recipient of money from fredie/fannie...............you guesed it the inointed one Barry Husien Obama. Go figure.



"dude, nothing we can say will make us like as childish/silly as the rants you post. We HAVE posted the parts, you chose to ignore them. We get it, you like soldiers that sell out their fellow soldiers for political gain, and you hate or hold in contempt those that take a stand. We get that you manage to see NOTHING but bad in Republicans, and nothing put pure and honorable intentions from fellow limp wristed libs. We got it already, now move on."
(PRO July 3, 2008)
 
You tell him 202!

It's a damn good thing there were no Republicans that took money from Fannie/Freddie. Maybe we should just take a look at who Fannie/Freddie contributed to and how much they received. Let's just how much money one has to receive to be considered Annointed.

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

I guess this story gathers more traction when it reads, Top 3 Recipients, instead of Top 10 Recipients. The dollar amount differences between parties are nominal, how nominal? About 3-6 dinner plates depending on which 1 out of 100 fund-raisers you attend.

I will not argue that both FM's have proven to be corrupt, they are both breeding grounds for the DNC, and I think Obama should distance himself from the likes of Raines and Gorelick.
 
You think he should distance himself from them but instead he has brought them closer. I guess he can't really do anything else after all the money they have given him.

You can talk top 10 and try to spin that all you want. None of the top ten except for one is running for president. Like I said before, what your savior Hussein says and what he does are two different things. But he's going to change! Give me a break. These guys got him in their back pocket.

BTW- The same link was posted earlier if you would read before you write.
 
I've got some time available now, so I'll expand upon my thoughts on the Fannie/Freddie bailouts, as well as that of AIG.

First, take political blame and finger pointing out of the discussion for a moment. The fact is, there is a GIGANTIC problem, and without intervention by the Federal Government, we very possibly could be facing the single greatest financial disaster of our time. Fannie Mae and Freddie Mac have long been getting more and more liberal in what they were willing to do in order to make more, and more profitable, home loans. For much of their history, you couldn't get a loan for more than 90% or 95% of the purchase price or value of a home. That changed some years ago, and you could get 100% financing. You could even get financing for more than the purchase price of the home in some cases, so "buy a home and put money in your pocket, too" seemed to be the theory of some.

None of these changes were based upon sound underwriting criteria, they was based on social engineering and were in response to pressure from congress to increase the percentage of Americans who could have the dream of home ownership. More new products came into the mortgage industry in the last ten years than likely existed during the entire history of this industry up to that point. We went from an environment where you had to have some money for a down payment, and had to be able to document your income and liquid assets, to an environment where you really only had to agree to the pricing of your loan, as there was a program available to fit just about any situation a borrower presented, with only the most extreme bad examples being beyond the ability of lenders to find a home for the financing to be placed with. Stated income was OK, stated assets were OK, 107% financing was OK, as a 2nd 125% financing as OK, and so on. Stated documentation for income and assets too burdensome? Go with a "NO DOCS" loan, just have some money for a down payment and you're in with decent (not good, just decent) credit.

This was all "OK" in the eyes of many because home values were rising, and rising equity took care of most of the risks. Debt portfolios were strengthened over time by increasing value of the underlying assets that backed these obligations. The only problem was, this isn't ever a permanently sustainable situation, at least in the sense that there will always be drops in the economy, and subsequently home values that accompany a slower economy. As soon as values started falling, the portfolios of many institutional investors had to be downgraded in regard to the quality of the underlying assets, and this made the securities that backed these mortgage pools more difficult to sell, and worth less when they were sold. And the ball started rolling down the hill....

All of a sudden, liquidity in the system evaporated, and investors to purchase the loans that were being made at the retail level were pulling back or going out of business at an unprecedented rate. Not only did this cause significant problems between lenders and investors, it caused a crisis of confidence in the system, and that was at least as bad. It was definitely a case of perception not only being reality, but perception getting ahead of reality. While I don't have hard numbers handy to go by, I'll guess that approximately 35% (likely higher) of the entire residential lending secondary market went away. We've lost secondary investors at an unprecedented rate. Imagine any other industry where tens of thousands of jobs evaporated due to a loss of confidence in the system, and this time it was brought on by the downgrading of securities that caused them to be unsaleable, at least at acceptable rates, and it spread across the breadth of the financial services industry in this country. It wasn't just the actual lenders who bought these loans on the secondary market, it was also the insurance companies, pension funds, Wall Street investment firms and so on who bought these mortgage backed securities that were suddenly worth less then they paid for them, and nobody wanted to purchase them even at steep discounts.

This situation has been one of the single greatest influences on the mergers and bankruptcies of the large financial houses in New York and elsewhere that we've recently watched unfold.

AIG. AIG is one of, if not the, world's largest insurance companies. In addition to writing normal stuff like the insurance coverages that consumers and businesses purchase, AIG insured many of the securities that have been held by investment firms and pension funds. AIG's problem is not a lack of assets, as they have nearly $1,000,000,000,000.00 (that's one trillion) of assets worldwide. Their problem is a lack of solvency, as they don't have enough liquid assets immediately available to satisfy claims that may be made againmst their policies. Many of these claims are currently from securities investors who hold these pools of debt that have gone bad.

The widely described government "bailout" is actually a secured loan at an interest rate of more than 11.00%. I watched a news report that indicated that when the government "bailed out" Chrysler, the airlines, and other industrial giants, they've not only come out whole, they've generally made a nice profit out of the deal. So, taxpayers are unlikely to be left holding the bag, even though the talking heads on the network news would have you believe otherwise. In AIG's case, that one trillion of assets is being used as the collateral for the government's assistance at this time.

One issue that is worth pondering is whether the Federal Reserve Bank was the best entity to provide this bridge financing for AIG. There is a school of thought that says it would have been better for the Department of the Treasury to handle this matter rather than the Federal Reserve, as the Fed is already stretched somewhat thin from their other intervention activities. Another worthwhile question to ponder is why they have chosen to shore up some entities like Bear Stearns and AIG, while allowing others like Lehman Bros. to go into bankruptcy. That's a hard one to figure out.

There's obviously far more to this issue than I've described here, but hopefully it'll give people a bit better understanding of the issue on a macro level.
 
LAST EDITED ON Sep-18-08 AT 05:22PM (MST)[p]>Mortgageman, first you want opinions then
>you note within your own
>thread let's not play the
>"blame game". So what is
>it? Do you want my
>opinion or do you want
>your opinion?

You are correct I asked for opinions on the bailout. Where in my post did I ask about what person or administration got us to this point? OPINIONS ON THE BAIL OUT, LONG TERM AND SHORT TERM. It's actually pretty simple if you just read it. Was it really that difficult for you to understand?

Yes, like many things I didnst not understand it.



>Again, here comes great Bush defender...CAelknuts.
>Along with another plea to
>not play the "blame game"
>but easily points the finger
>at Clinton. I ask you,
>how pathetic is that, to
>contradict yourself within 2 sentences.

Please show me where I contradicted myself. I asked for opinions on the bail out in the long term and short term. (I guess I need to put it in triplicate for liberals that don't or won't even read the original post)

Is your name CAelknuts? Do you know your name? Read CAelknuts and tell me that his blame game statements, and subsequent inference that it was Clinton's fault is not a contradiction.

Look below, see there is your name, right below this sentence. See now I am addressing you and the post.

>Mortgageman there is a term for
>a type of government that
>supports corporate welfare. Capitalism is
>not that word, is it?

That's my short term view! On the surface it redefines our economic system.

Have you read anything thus far in this thread? Serious

Yes, Super Duper Serious I have read it

>It's not just Freddie, Fannie, we
>now have the U.S. taxpayer
>dabbling into Bear, AIG, and
>possibly the top 3 U.S.
>automakers in the near future.

This is also my more expansive long term view of the scope of related corporate bail outs confronting the taxpayer. I guess like the Bush Adm., although related we just won't talk about the other bailouts.

Once again you are way off track. I asked about Fannie and Freddie. Is it too difficult for you to address just these issues? Concentrate, please?

No, because they are related, O.K. I'm concentrating....My name is Forthewall and, and, and, got it, here it goes I am totally focused now.

>People act like this comes as
>some type of shock. Both
>FM's have been a subject
>of possible failure for several
>years. Yet, their CEO's and
>top execs reaped in millions
>in bonuses. Congress has also
>already gambled and lost by
>allowing both FM's to raise
>their holding ceilings. Detractor have
>been predicting this days arrival
>for years.


FINALLY you start addressing the initial post. Thank you!

Your quite welcome. Hey I'm sorry you requested opinions, my bad. I had no idea that my opinion had to be pre-defined in it's scope and myopic in subject matter. Next time I'll know...

>Mortgagman as you well know due
>to deregulation there was an
>over abundance of many shady
>qualifying schemes, rubber stamping of
>mortgages, and laxed credit standards.
>You are in the business,
>so the reality of financial
>collapse after all the "Shenanigans"
>should really come as no
>surprise.


Please tell me if I am surprised enlightened one.

That's "Oh Lord Enlightened One" to you, I don't know are you suprised? A rational person would conclude that you are not surprised given your profession and the highly publicized corruption at both FM's over the years. I believe I already mentioned that.


>In an atmosphere of deregulation, the
>mortage, real estate, construction, banking
>industries, along with city, county,
>and state coffers were getting
>filled. Everybody was making money
>hand over fist and the
>President loved hyping record home
>ownership at every turn.
>Should the CEO or the executive
>staff of either FM's or
>AIG receive their parachutes?????


You're back on track....Good Boy!!

Thank you Mr. Idea Train Conductor! I like a good pat on the head and taking a ride on the Idea Train.

>I know why you want to
>see it privatized quickly, so
>it can be classified as
>a "necessary measure". If it
>is not privatized quickly we
>can classify our entire economy
>as something other than capitalism.


I have no faith in government running the mortgage industry.

Well don't worry about the government, they diversified, their getting into the Insurance business too. But let's not talk about that.

>Better pray nothing else happens, you
>are seeing the last measures
>of preventing what I think
>in the end is the
>inevitable. This whole bailout including
>AIG, opens a whole new
>can of worms, we as
>taxpayers don't even know about....yet.


Besides getting off track for 95% of your post it wasn't bad.

Wasn't bad? I thought it bordered somewhere between rivoting and revolutionary. I think highly of myself.

Here's something you should look at while you play the blame game.

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

Do you really think that Obama (FNMA & FHLMC 2nd biggest investment of lobby funds) has the peoples best interest at heart? If he saw this coming why hasn't he pushed for change in the mortgage industry? Why has he taken so much money from Fannie and Freddie and done nothing? I'm sorry but what your boy preaches and what he actually does are two different things.

I'm not falling for this trick again with your questions!

First, you tell me how I should opine appropriately before I express our opinions, I mean your opinions, Argh! I meant my opinions which fit within in your stated criteria.

Anyways, I gots answers so if you wish for the "Oh, Enlightened One" to respond just let me know. I posted the same link in a later thread in case 202 missed it, sometimes he don't reads to good.

This makes you dizzy after awhile......................
 
Hey CAelknuts, What in the hell are you doing? Nobody wants to hear about friggen AIG!!! This post is about Freddie/Fannie you dipstick. Man you are so dense I bet your opinion will only rate as "kinda good" from Mortgageman. I'd say 63.7485% of your post isn't even about Freddie or Fannie. Super Duper Seriously

Mortgageman, tell CAelknuts he needs to stay within certain guidelines when it comes to his opinions.
 
LAST EDITED ON Sep-18-08 AT 05:24PM (MST)[p]Fanny & Freddie CEO & Executive Job Interview

Interviewer:

Mr. Soandso
You are a certified liberal leftist democrat with a nice resume and a long record of promoting socialist & leftist policies. Should we decide to hire you we want you to know that the previous CEO as well as the CEO before him did an outstanding job of making bad decisions, making bad loans to people and companies that we knew had no possibility of ever paying us back or making good on their loans. That CEO was fired as was the CEO prior to him, and the one prior to him; and - as you will eventually be. You will become rich beyond your wildest dreams making tens of millions of dollars in just a few short years, then the job will be turned over again to another liberal leftist democrat with no real business or economic sense. My question - Will you vow to continue our bad business policies as CEO? Will you continue our liberal policy of making bad loans to people and businesses with no hope or possibility of us collecting on those loans?
Mr. Soandso: Yes sir I will

Interviewer: Is this the kind of job you are up for and do you want the job?

Mr. Soandso: I'm up for it and yes I want the job.

Interviewer: You're hired, when can you start?

Mr. Soandso: Thank you sir, I can start right away, in fact if you just hand me that checkbook there on your desk, I'll head right over to Capital Hill and start handing out checks to our friends in the Democratic Caucus.

Interviewer: Jane! (secretary) get that limo over here right away we just hired us a real go getter and self starter.

Soandso! don't forget to throw a few bones to the GOP we have to make it look bipartisan
 
LAST EDITED ON Sep-18-08 AT 05:42PM (MST)[p]Wetmule, who decides a CEO salary, bonus, or parachute in a publicly traded company whether it's both FM's or Exxon/Mobil?
 
For the wall.....

LMAO!!!

I gave up a long time ago when this whole thing turned political. I gave in and went political as well.
 
LAST EDITED ON Sep-18-08 AT 08:39PM (MST)[p]FTW, rather than get down in the gutter with you and engage in name calling such as you've done, I'll instead take the high road.

I had hoped that by providing a bit of information about the events and reasons that led to the problems at Fannie Mae and Freddie Mac, that some people ( at least those who might be interested) would be a bit more enlightened. As far as AIG is concerned, you're correct that wasn't asked about, but it IS directly related to the same issue and will be a big part of the eventual solution going forward. It is a parallel problem and the solution to the Fannie/Freddie mess will ultimately be intertwined with AIG and other financial institution's successes or failures.

FTW, I'm disappointed that discussing all of that angered you; but, I'm also disappointed that you have difficulty in engaging in civil discourse.

Now, to indulge Mr. Forthewall, I'll keep this set of comments directly and exclusively in response to the origial question posted.

I think that the Federal Government's intervention of the Federal National Mortgage Association,(Fannie Mae) and Federal National Home Loan Corporation (Freddie Mac) was absolutely necessary for the health of the U.S. financial system, not just that of Fannie or Freddie. I think that short term, it was essential to keep at least one of them from defaulting on their obligations and it helped to stabilize the markets in a significant way. Longer term isn't so clear, but it'll probably all work out fine in the end. My fear and concern is that the Federal Government will have too great a hand in the running of the future FNMA and FHLMC entities, and I don't have any confidence in our politicians to run something that complicated well, at all. I'm not saying for one second that the ousted management of these two entities did a good job, I am saying that the government would do worse.

The problem we have to some degree, long term, with FNMA and FHLMC, is that the goverment may not take a regulatory role, but will try to have a supervisory or management role. That WILL NOT be good for either agency, nor will it be good for the housing market. The government's best role is that of regulator, or loan guarantor, the role they function in with FHA financing or VA financing.

While it doesn't go absolutely directly to the question at hand, I believe there should be legal and civil recourse against the executive management of both organizations. I don't have a problem so much when someone like Lee Raymond gets an exorbitent severance package after what he did for his shareholders, but when the heads of Fannie and Freddie walk away with millions after the carnage they left in their wake, they need to be held accountable. They had a fiduciary responsibility to their shareholders, which they abrogated. they need to be taken to task.
 
In an effort to keep my last post exclusively to the question that mortgageman originally posed, I left this comment out. In an effort to enlighten Mr. Forthewall, I'll now respond to his question about who determines the salaries and compensation packages for CEOs.

The compensation packages for top level executive management at publicly traded corporations such as Fannie Mae, Freddie Mac and Exxon-Mobil (the three you alluded to) are determined by the Board of Directors of those respective corporations. The Board of Directors has various subcommittes, one of which is always a 'compensation committee'. The compensation committee will generate a recommendation which is then voted upon by the full Board of Directorts.

I hope that sufficiently answers the specific question you posed.
 
Dear CAelknuts,

First let me extend a sincere apology! My response to staying on topic and hammering your thread was a poke a Mortgageman.

Your thread was fine, I too mentioned AIG and Mortgageman expressed great disapproval, accusing me of not staying on topic. Read through the whole post...you'll get it.

I thought you expressed yourself quite eloquently and I fully agree with your future concerns, insight, and observations.

The problem as I mentioned before to Wetmule is, who decides the Salaries, Bonuses and Parachutes in a publicly held corporation?............ Exactly

So if you defend the parachute given to the Ex-CEO of Exxon/Mobil, then what else can you say....Capitalism.

You want a good laugh, watch the news as Congress stands for their bi-partisan photo-ops, they all took money from the FM's.

Again I do apologize I hope you see the funny as you read through the post.
 
Yep CAelk,
I would only add that often times the makeup of the compensation committee and or BOD is filled with so called
"inside" directors - translation - friendly directors. Unfortunately in the SEC rules there isn't much teeth - more like gums - that might enable shareholders to do anything at all about an overpaid executive or CEO and the perks, benefits that may be hidden inside their sweet deals that may or may not be disclosed to interested parties.
 
There is a day & night, gigantic difference in the package that Lee Raymond got when he retired from Exxon/Mobil and those that went or are going to the outgoing CEO's of Fannie Mae and Freddie Mac. The chief difference is that Exxon/Mobil is hugely profitable and has awarded it's shareholders very handsomly over the years. In fact, Exxon/Mobil has been so profitable that it is by far the single biggest taxpayer to the US Treasury. While his compensation may be huge, the performance that Mr. Raymond executed was equally huge to earn it.

The problem comes in when executives are compensated in a manner that bears no resemblance to their performance. Nobody should be upset when a CEO retires and gets a giant package if his shareholders were well rewarded because of his leadership. It is when there is a disconnect between the performance and compensation that everyone should be taking them to task.
 

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