China made Paulson bail out Freddie and Fannie

Discussion in 'Wall St. News' started by W4rl0ck, Aug 4, 2008.

  1. W4rl0ck


    If Paulson hadn't bailed out Freddie and Fannie the Asians would have dumped the bonds. They have the USA by the ying yang.

    "Concerns about the financial health of the biggest U.S. mortgage finance company had driven Fannie Mae's borrowing costs to the highest since March the previous week and its shares had tumbled 45 percent on the New York Stock Exchange. Investors in Asia, the biggest foreign owners of Fannie Mae's $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks.

    Paulson told Mudd he had a plan to restore confidence in Fannie and Freddie, the core of the Bush administration's efforts to revive the U.S. housing market. ``At that point, the proposal began to take form,'' Mudd, 49, said in an interview. ``We're trying to solve a crisis of confidence. Would this do it?''

    The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie. Congress included the proposals in a broader housing bill that President George W. Bush signed into law last week.

    Asian investors were among the most important groups to soothe because central banks, financial institutions and funds in the region own $800 billion of Fannie Mae and Freddie Mac's $5.2 trillion in debt, according to data compiled by the Treasury. U.S. officials were concerned that sales from the region would push lending rates higher, said the people, who declined to be named because the discussions were confidential."
  2. anyone with 2 brain cells that don't hate each other can figure out what's going on

    gold didn't dump 70 bucks by accident....

    99.99% of the US population is too stupid to figure out what's happening

    all the better...
  3. I'm gonna go ahead and call Black Wednesday right here and now.
  4. Why Wednesday?

  5. Follow through from the FOMC meeting.
  6. FOMC will spin all the negative news to be positive

    We have seen the same drill month after month
  7. It is interesting that after FNM, FRE bailout, commodities are coming down, china being the main driver of commodity prices. Has China been using the financial markets as a weapon against the US?
  8. Perhaps they are the only ones who can hold US Gummint's "feet to the fire"...
  9. I'll go on a limb and make an out of my ass statement that the great commodity crash of 2008 has begun, and will be trumpeted as a cause to get bullish on the USD and equities yet again.

    If I'm right, it will be labeled as a lucky guess, and if I'm wrong, it will be painted as an asinine statement.
  10. But surely rapid inflation will cause commodities to revert to their (adjusted for inflation) mean.

    #10     Aug 5, 2008