U.S. Government has reached a decision to seize the giant mortgage companies FreddieMac and

[seemslikeadream]

http://blogs.usatoday.com/ondeadline/2008/09/reports-fannie.html
Reports: Fannie Mae and Freddie Mac to be seized




Top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, have been informed that the federal government is preparing to seize the two companies, dismiss top executives and place them in a conservatorship, according to reports in The New York Times and The Washington Post.

The Times report cited government officials and company executives who had been briefed on the discussions, while the Post cited "sources familiar with the conversations."

Their reports followed an earlier story in The Wall Street Journal that the government might soon step in to shore up the companies.

According to the Times account, the "executives were told that, under the plan, they and their boards would be replaced, shareholders would be virtually wiped out, but the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said."

The Post said the government would provide quarterly infusions of cash in an effort to minimize the initial cost of the rescue.

According to the Times, "It is not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars and make any rescue among the largest in the nation’s history."

[texastoast]

1. Link? n/t

[seemslikeadream]

2. found it

http://www.nytimes.com/2008/09/06/business/06fannie.html?_r=1&bl&ex=1220760000&en=911c9604f792c501&ei=5087%0A&oref=slogin

[texastoast]

4. Conservatorship?

Oh my God.

If you have stock investing in real estate investment trusts or any other financial vehicle like that, this is not good news.

The whole market will be watching this. Oh my God.

[DianeG5385]

3. This is political. They plan to privatize it

[texastoast]

5. Link? n/t

[shraby]

8. I believe the very reason they're in trouble is that

they were privatized some time ago. It's now coming back under the government supervision..and maybe some regulations will be put in place once again.

[seemslikeadream]

6. Fannie Mae and Freddie Mac 'bailout near'

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4688214.ece

Fannie Mae and Freddie Mac 'bailout near'

Tom Bawden in New York
The US government is close to finalising a plan to bail out Freddie Mac and Fannie Mae, the two mortgage giants which collectively underpin America’s entire housing market.

An announcement on the plan, which analysts believe is most likely to involve a cash injection of billions of dollars into the two groups, could be announced as early as this weekend after a meeting yesterday between Ben Bernanke, chairman of the US Federal Reserve and Henry Paulson, the Treasury Secretary.

The government is also thought to be considering an alternative plan to lend money to the groups’ rather than investing cash directly.

Morgan Stanley is working with the government on the plan, which is likely to include senior management changes at both Fannie and Freddie.

Related Links
Panic as Fannie Mae and Freddie Mac dive
US Treasury rescue for Fannie Mae and Freddie Mac
Buffett predicts game over for Fannie and Freddie
The bailout would come two months after the US government received approval from Congress to pursue a range of measures to help prop up the mortgage giants. These include the ability to effectively take control of the two groups by injecting an unlimited amount of taxpayers money into them in return for newly issued shares that would give the government a majority stake

[seemslikeadream]

7. Fannie Mae, Freddie Mac shares dive on report of rescue plan

http://www.nydailynews.com/money/2008/09/05/2008-09-05_fannie_mae_freddie_mac_shares_dive_on_re.html

Fannie Mae, Freddie Mac shares dive on report of rescue plan
THE ASSOCIATED PRESS

Friday, September 5th 2008, 9:09 PM

The government may soon step in to provide a financial boost to mortgage finance companies Fannie Mae and Freddie Mac, The Wall Street Journal reported late Friday.

Amid fears a rescue would wipe out investors, Fannie shares dropped 21.8%, or $1.54, to $5.50 in after-hours trading, while Freddie slumped $1.06, or 20.7%, to $4.04.

An announcement "could come as soon as this weekend," the paper said, but noted exact details of the plan couldn't be learned.

Representatives of Fannie and Freddie declined to comment. A Treasury spokeswoman said officials "have been in regular communications" with Fannie and Freddie, but refused to comment on the story.

The Treasury hired Morgan Stanley last month to serve as an adviser to the department on potential use of government funds to help the companies. This summer, Congress passed a plan to provide them with unlimited government loans.

[seemslikeadream]

9. These guys predicted it right

http://cryptogon.com/?p=2909

EMERGENCY: U.S. GOVERNMENT TO TAKE “UNLIMITED STAKES” IN FANNIE AND FREDDIE
July 14th, 2008

WARNING: This is not a recommendation to buy, sell or hold any financial instrument.

The firms that make the mortgage industry possible in the U.S. are about to be taken onto the books of the U.S. Government.

I don’t know of any clearer way of summing it up.

In all of my years of observing the farce of “the free market” in the U.S., it has never appeared more absurd than it does right now. This news is remarkable, even to someone as short the U.S. Dollar as me. This is take-your-breath-away kind of news.

Are they using the term “unlimited” because that somehow sounds better than $5.3 trillion, or is there something else we don’t know about yet? U.S. taxpayers and dollar holders are essentially going to eat the real estate crisis.

The advice I used to give was: Get your ass, your family and your money out of the U.S. It’s probably too late for that. Dig in. Shelter in place. Brace for impact, etc.