On Jul 14, 9:25*am, "mozza" <h...[at]me.not> wrote:
- quote -

mortgages granted, another round of liquidity crisis that would surely
affect individual investments, and a lower stock market coupled with a
continued run on the dollar (making any European vacation a "no-
plan").

Finding the responsible parties that caused this mess (the one that
requires extraordinary measures) can be done in due time.

Those who do not want this type of crisis to happen again, simply do
not give your investment money to those who would speculate in CDO's
(collateralized debt obligations, a.k.a. bundled mortgages) with it,
and don't buy more house than you can afford.

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mozza wrote:
- quote -

But isn't this exactly what the loan people said about the sub-prime
scheme. The house that you can't afford will be your collateral for the
loan you can't pay off.

Don't know if it was a national ad campaign, but there was one a few
months ago where this guy presented a potential $1M lottery ticket to
the teller and tried to borrow on it. Sounds much like the above
legislature. What's scary is there may be similar odds that it can be
pulled off.

Chip

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FNM/FRM losses aree 0.2% of assets, which is pretty
good in this mortgage market. Plus if the FED allows,
theyll soon be able to borrow money at 2% to reloan
as mortages in the 6-9% range. Speculators are
trying to kill them, but it may be mostly panic-mongering.

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Jim Bianco:
So Fannie and Freddie can use their own
securities as collateral at the Fed?? Can they
create them for the specific purpose of using
them as collateral at the Fed? This is so circular
I'm getting dizzy? (Imagine writing yourself a
check for $1 million and then going to the bank
and saying "now that I have $1 million can I get a
collateralized loan for $1 million?") Does this
make any sense to you?


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