Well, well, well. Here’s a surprise. If you’ve been in a coma for the past eight years (via The Washington Post):
The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives and prop them up financially, federal officials told the two companies yesterday, according to three sources familiar with the conversations.
Under the plan, which could prompt one of the most sweeping government interventions in financial markets in U.S. history, federal officials would place the firms under a conservatorship, a legal status giving the government the option and time to restructure and revive the companies, the sources said. The value of the companies’ common stock would be diluted but not wiped out, while the holdings of other securities, including company debt and preferred shares might be protected by the government.
Now of course this is coming out of your taxes, but then so will every other cluster fuck this Administration has wrought. But remember, permanent tax cuts for the rich are the only way to solve your financial problems. I know it doesn’t make much sense. But what do you know? You’re poor.
But in better news, smaller banks continue to … um … do better than they would if someone hit them with an ICBM.
Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.
It was the 11th failure this year of a federally insured bank.
But hey, the common taxpayer (not to be confused with the rich taxpayer who can’t pay taxes because it makes him feel all oogy inside) won’t have to pay for this one. Right?
Wake the fuck up.
The FDIC estimated its resolution will cost the deposit insurance fund between $450 million and $550 million.
The other signs that anyone who says the economy is improving is a pathological liar will be covered in a separate post. Must have coffee.
Update: Let’s hop in the time machine and turn the dial waaaaay back to May 7, 2008.
Treasury Secretary Henry Paulson on Wednesday endorsed moves by Fannie Mae and Freddie Mac to expand their roles in the stricken mortgage market while pressing for greater oversight of the struggling government-sponsored companies.
Paulson acknowledged that Fannie and Freddie, which together issue more than three-quarters of securities backed by home mortgages, have been “stressed” by the crisis in the housing market. [Much like a mouse is “stressed,” by being run over by an 18-wheeler -ed.] But he rejected the view, held by many analysts, that allowing them to buy up additional mortgages poses a threat to their stability and the financial system. [LA LA LA LA I CAN’T HEEEAAAR YOOOOU! -ed. channeling Paulson]
Moreover, if investors are willing to pump fresh capital into Fannie and Freddie, the companies should “go get it” Paulson said.
And then they should buy this bridge that carries I-35W across the Mississippi. It’s a bit “stressed” but it’s just fine.