If any of you have enjoyed the “give and take” between Sean and I about the Fannie Freddie death watch, it appears, based on reports in the Wall Street Journal and others that the bailout is happening this weekend. What shape is it taking? Lots of rumors, very few facts.
Here’s what I feel safe saying I know for now:
1. If you own common shares in Fannie or Freddie, you can probably use them for wallpaper.
2. If you own “debt” from Fannie or Freddie, you’ll be fine.
3. I’m still going to be writing mortgages next week. The purpose of the bailout is to make sure the housing market stays moving and doesn’t precipitate a total financial collapse.
If I know more, I’ll write more later.
Tom Vanderwell
Robert Kerr says:
re: bailout
Dear Brian Brady.
I told you so.
September 5, 2008 — 10:24 pm
Sue says:
Thanks for the update Tom. No debt or wallpapering in sight here, thank goodness.
September 6, 2008 — 5:48 am
San Diego MLS says:
From CalculatedRisk:
http://calculatedrisk.blogspot.com/2008/09/fannie-and-freddie.html
September 6, 2008 — 12:01 pm
Sean Purcell says:
Tom,
Looks like Fannie & Freddie are being taken over… just as I have been saying for some time now. 🙂
In all seriousness: I believe this is a mistake, financially and philosophically, that we will regret. Fannie & Freddie had a crisis of faith not operation. But they were too big and too hybrid for anyone’s liking. I’m guessing the Treasury sees this as a great opportunity to take them down. Either that or there is a lot more going on than we are hearing. In any case, I am sure you and I will have plenty more to discuss once we hear details of the plan.
Bottom line: you were right Tom.
Well reported and well done. I shall have to work twice as hard now in our debates. 🙁
September 6, 2008 — 2:16 pm
Brian Brady says:
“I told you so.”
Yes you did. Robert, why don’t you write a blog? Your advice would be helpful to many of us.
September 6, 2008 — 2:41 pm
Tom Vanderwell says:
Sean,
I agree with you that this is a financial and philosophical mistake, but I also believe that it is, shall we say, the lesser of two evils. I’m not sure that I’d say $3.1 billion in losses in the last 90 days is a crisis of faith.
I don’t doubt for a moment that we’re going to have plenty to discuss as things unfold.
While I appreciate the character and integrity it takes to admit that I was “right,” I have to say I would have rather have been wrong and had this not happen.
I look forward to continued conversations and debates on the issues. It sharpens and benefits us all I believe.
Tom
September 6, 2008 — 4:16 pm
Robert Kerr says:
re: Brian
I lack both the free time and creativity.
September 6, 2008 — 8:06 pm
Bob says:
“Either that or there is a lot more going on than we are hearing.”
I think we are hearing it, but not everyone is listening, or wants to believe what they are hearing. $3.1 billion in losses in the last 90 days is an earful.
September 6, 2008 — 9:47 pm
San Diego MLS says:
Starting any minute:
U.S. Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart to release details of the planned conservatorship of Fannie Mae and Freddie Mac at an 11 a.m. press conference in downtown Washington.
September 7, 2008 — 8:05 am