If Hank Paulson is involved, you may rest assured that what will happen will be best for GS and the rest of Wall Street to the detriment of the American taxpayer and the US Dollar.
ok someone here as 0 idea what there talking about (i could be me) bill gross=looser. wasn't he betting the us govt would guarantee the implied backing, i think? He was betting that by doing this GSE agency bonds would be the same as treasury. if gse bonds=treasury, then the price of that bond goes up and that is what bill gross was betting on. right now the spread ws normal friday of around 40 basis points i think? today the spread will probally increase a little. please someone who knows what they are talking about let us know whos right here. and winer=us tax payer, we do now own fre and fnm, we didnt take allt he debt for now. looser china=gse bonds are not treasurys still
I read a few pieces about FRE and FNM this morning, and think this one: http://www.portfolio.com/views/blog...ulson-the-fannie-and-freddie-bailout?rss=true is probably one of the best. It's noticeable that (at the time of writing) that FRE is up "only" 27% versus a gain of 32% for FNM. I don't think the Paulson plan does anything for equity holders, and ultimately in the coming days or weeks, FRE and FNM will either be forced to raise equity and/or be nationalised.
If the treasury buys an equity position in the GSEs, it will be preferred equity that converts into debt or something, in any case it will be HUGELY diluting to the common holders. I cannot imagine a different scenario, anything else would be a nightmare scenario for taxpayers.
it is clear that we are in trouble when the only solution is buy low/sell high for the fed,taking advice from a former wallstreet whale is our only hope,we are in huge trouble,wasn't it wallstreet and the hedge funds who fleeced the banks in the first place,why not let all the convicted bank robbers out of jail and ask them to fix our banking problems
Freddie Mac's auction of $3 billion of short-term debt Monday sold at better than expected prices as the offering was well received by investors. -WSJ