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Barney Makes Hash
Barney Frank (D. Mass) is head of the very powerful House Financial
Services Committee. Barney is the Rainmaker for the country’s mortgage
agencies, Fannie and Freddie. He was the Don that blessed everything
that happened for years. Without him these two dead ducks would not be
the disaster they are today. And Barney Frank has no clue how our
system works. He proved it several times on Friday.
He started with a stupid comment in the WaPo: "People who
own Fannie and Freddie debt are not in the same legal position [as
those who own] Treasury and I don’t want them to be. ”. During
the day he tried to backpedal away from this dangerous assertion. But
he really stuck his foot in his mouth in an interview with Maria
Bartiroma.
At several points in the interview Frank makes clear his view that
mortgage securities issued by either Fannie and Freddie prior to the
September 2008 (conservatorship) were tainted and there was no
certainty that these would be paid in full.
When Maria pushed him on this ridiculous position she asked him what
should the foreign central banks, who have been long term holders of
Agency paper do, he responded, “Who will they sell it to? Themselves?”
Is Mr. Frank suggesting there is no liquidity in aged mortgage paper
guaranteed by the Agencies? If there is a shortage of liquidity he may
be responsible for it.
These comments prove that Congressman Frank has no clue what he is
talking about. There is no basis for a different treatment of Agency
securities based on issue date. There has been no bankruptcy that would
establish seniority on new issues of debt.
As part of the QE effort the Fed has purchased a boatload of agency
paper that was issued prior to conservatorship. Does Mr. Frank believe
that this is money good and the original holders are out in the dark?
Who might be the holders who own Agencies from prior to 8/08? A lot of
US bond funds, a ton of widows and orphans and yes, a few big foreign
central banks. Barney F. wants to screw that audience?
For myself, I would love to see that this gets blown out of
perspective. I hope that China or some other Asian central bank says, “Sorry, too much confusion. We vote with our feet now. Bye, Bye”.
I hope that Geithner is forced to contradict his pal Barney. I hope the
mortgage market spread against Treasuries backs up about 25BP as a
result of this foolishness.
That is unlikely to happen. The reality is no one listens to Barney
Frank. They know he is just blowing smoke so he can look like he is
playing tough to his audience back in Massachusetts.
We need a wake up call. Maybe a big blip in the mortgage market would
do it. We need to get rid of the likes of Barney Frank. He led us into
this mess. He is still mucking things up. And he is still running the
show and setting the policy for the future.
We got rid of the fat cats from the private sector financial
institutions that caused all our problems. We got rid of the fools who
ran Fannie and Freddie into the ground. Now it is time to get rid of
the politicians that pulled all of the strings and made/let it happen.
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I still own 10 FNM and 10 FRE stocks. I need all the help I can get to get my 100 bucks back. haha
Attention: Fat gay pig slips tongue again. Olds (widows) will be dumped, news will be bailed. You all knew something had to give. Call it bankruptcy, reorganization, thievery, whatever tingles your pee pee. The only people who get saved are those "doing God's work". If you peel this baby, it's all about eugenics and real bad jobs, coming soon.
Bruce, the link doesn't work, here it is:
http://www.youtube.com/watch?v=MTaQGQVggrA
Tks pal..bk
What no complaints on victimization of Barney bc he's a homosexual? Geez on Clusterstock there were at least 2 or 3 commentors claiming discrimination, bigotry, homophobia and probably racism over a similar article over there.
This is a tougher crowd!!!
All trivial stuff. i mean, what congressman hasn't gone both ways and done some hard drugs? gots to, to be in da club! Scull and Bones (et al) initiates anyway. You best believe Fwank took some of the same oaths at Hawvawd
Mass: just get rid of him.
They don't call Barney Franks the Banking Queen for nothing.
http://www.youtube.com/watch?v=7oqD5z96HEg
yes! hahaha.
So when do we get rid of the Idiot Talmudics and their F'kein J'd Puppet Show known as CNB.C.?
Someone stick a big fat sausage in Barney's mouth.....on second thoughts he would see it as a reward.
Members of Congress spend tax money on luxury cars, high salaries and perks
Senators, representatives boosted own budgets by 5 percent last year
Job losses, home foreclosures and the worst economy in decades have forced many Americans to cut back or do without.
But not members of Congress, who voted themselves a 5 percent increase in their own budgets for staff salaries, office expenses and perks last year.
http://tinyurl.com/yjqajrt
We did?
Well, a lot of them.
b
At least half the fools who worked at Fannie/Freddie pre-09/08 that I know are still there, getting overpaid for doing government work.
And Franklin Raines made $90 million while heading FNMA. Where's the calls for claw back?? Won't happen -- he is black and a Democrat. Can not go after those kind of bankers.
Which is it?
They ARE guaranteed, so their debt is the debt of the US and part of the national debt?
Or they ARE NOT guaranteed?
Geithner and Bernanke are trying to have it both ways.
The fact that we are even having this conversation means that the risk/reward in owning agency MBS is not good. FNMA mbs with a 4% coupon yields about 50 bp over 10 yr treasury with all kinds of prepay risk. Since treasuries are exempt from state and local taxes and MBS are not, they after tax yields are almost identical.
Like I said earlier, the only Obama and the libs care about is passing healthcare. This will all get swept under the rug for a few more months. Barney knows the price tag will be high. He is just setting us up.
ginnies carry full faith and credit, fannies and golds do not, there should be at least a 50bp price differential to compensate for that difference. note that bernanke is mostly buying fannies and golds, because they need the support, ginnies will be fine on their own.
I have a feeling that some Agency holders are about to be screwed big time.
No way the courts will be able to support this paper -
no problem
the savior of the world and person of the year, Ben Bernanke, will buy 'em all!
Even Barney Frank realizes agency debt is no good.
When push comes to shove, the courts will not allow the economic destruction of the citizens of the United States - just to bail out the fraudulent contracts of a financial industry and regulatory crime syndicate.
Barney: verwee simpo, if you had paper before 2008 conservatorship it's no good, when we took it, it's good, after Dec 24 when FED took it it's no good...? WTH is this guy talking about?
Barney Frank is now contradicting the Federal Reserve, (Private Bankers) and Tim Guitner, (U.S Treasury), who are guranteering Freddie/Fannie, subprime derivative/asset-backed securities, owned by the Chinese and Japan?
Is he serious?.....
But what he said is perfectly consistent with what is printed on the prospectus of every Fannie or Freddie MBS.
i had made my comment above in the thread before i saw yours....
seems to me that they are not backed by full faith and credit (i've always been under that assumption) yet the fed and treasury want to "imply" such so that a big dump doesn't happen.
ghost....you really should write a couple of pieces series on this for ZH, whadda u say??
But it was implied, wasn't it? Or do we have a rouge U.S Treasury? http://www.reuters.com/article/idUSWBT01369320100305
"He started with a stupid comment in the WaPo..."
"But he really stuck his foot in his mouth in an interview with Maria Bartiroma"
Well, it must really be stupidity as we know Barney was not mesmerized into saying something stupid because of Bartiromo's rack...
Keep in mind though, Frank has made a career out of saying populace things publicly and doing the exact opposite when lobbyists and campaign bribes are in the back room. Need we go further than Frank publicly supporting Ron Paul's bill and then voting against it in committee?
Oh Yeah, It Is an Election Year
A lot of Frank supports to the teevee cameras, he shreds in the bills. Hey, it is successful political policy. Populace speeches and duplicitous sell outs got this one nobody Senator all the way to the White House.
One of the largest holders of Freddie and Fannie MBS and CMOs? Your local community bank. Whether we want to be on the hook or not, we will be, until the microprocessor in Bernanke's digital printing press melts down.
Typical Barney Frank.
Attempting to put himself on the side of the righteous, and not afraid to revise history ... Don't underestimate Barney's political instincts. Barney knows darn well that these Agency securities are NOT MONEY GOOD.
He wants to be able to say 'told you so' (just like Pelosi). As this thing turns into trials for fraud and treason, televised lawsuits and congressional hearings, and trials, look for all these folks to turn tail.
No politician can win as being "pro-financial-industry-government-bank-corruption-and-theft." Anyone holding agencies WILL INEVITABLY face huge and scandalous losses. Probably much much much sooner than later.
Impeach Barney's integrity, but don't dismiss the message -
JFC! What more proof do we need?
sheila is pushing principal forgiveness, how do you think that is going to affect the value of fannie/freddie. or houseprices? fannie and freddie will not be able to pay back bondholders, and the us is too broke to cover them.
http://www.housingwire.com/2010/03/04/bair-too-soon-to-know-how-successf...
Bair said the administration now recognizes that problems in the mortgages industry continue to evolve. “Now we’re dealing with underwater mortgages,” she said. “That’s why we’re actively looking at principal write-downs within our loss share agreements and other failed bank programs.”
The Bear said this. She really loves spoiling the party. "The FDIC is insolvent." she said last year (paraphrasing). Definitely not invited to Bawnee's pawdy this weekend She La Bear.
That will help tank house prices. Brilliant, Sheila.
Barney did the US taxpayer a favor, by highlighting the uncertainty around the status of these toxic twins, maybe they will be put out of business faster.
Thank you Barney, for doing something right for once.
Don't misunderstand Barney Frank. Barney is shrewd political chameleon. He's always had good instincts on political inevitability - and an uncanny ability to convince people that he was "against" the latest debacle.
So - forget about his integrity. But don't dismiss the message. Agency debt is NOT money-good. Anyone who has purchased that debt faces staggering losses in the near future. When the lawsuits and congressional hearings and special prosecutors come - and you can now bet your arse they will be here very very very much sooner that people want to believe - Barney wants to position himself as "anti-government-banking-crime-syndicate-that-stole-from-and-bankrupt-the-West" and not "pro-government-banking-crime-syndicate-that-stole-from-and-bankrupt-the-West"
Agency debt will not survive the collapse of the financial fraud economy. Barney knows it. So should you.
"Agency debt is NOT money-good."
Agreed. He gave fair warning to those who might think of buying it.
"To my rich friends who look to me for clues as to what the Clarks, Rocks, and Morgans are about to make the Congress do; do not buy agency debt. Also, we are having a party at my mansion this weekend. Bring your thong. I will be wearing mine. Blippity bloop." Bawnee Fwank
always appreciate your insights ghost....
There is no qustion that the US must restructure.
There are more and more countries that are going to owe an exhorbitant amount of the annual tax take, thus leving only a smaller portion for current govrnment programs.
Greece, Spain, US and others are going to look like developing countries in a perpetual game of of trying to deal with the situation of having most of the annual tax take going to debt interest payments.
Restructuring taxes and vanquishing debt now is the only solution, unless of course the baby boomers want to saddle their children and grandchildren with the boomer problems.
Great. If the bonds will not get par, I guess the preferreds are worthless.
Guess who has tons of the preferred on their books representing a meaningful amount of their capital?? Banks of all sizes.
And lastly, no references to body parts (foot or otherwise(!)) that are or have been in Barney's toothless mouth.
the preferreds are worthless, have been since conservatorship.
Agreed. Preferreds = worthless.
Barney Frank is such a character. He has infrequent moments of lucidity but the most typical running of his mouth spews political ambition which is inherently self-contradictory.
Stupidity, incompetence and corruption are the common currency on Capitol Hill.
Barney simply opens his big mouth enough to display it. Pelosi and Reid are another pair of blathering bozos. Nothing changes without a departure from their various thrones.
It's sad that there are morons in this country who voted for him. It's even more sad that there are political operatives who nominated him, and lobbyists who pay him off to receive billions in undue profits.
but we have to forget him and whatever he says , and like Bill Gross make some $$ off this government!
The gentleman from Massachusetts is a blathering idiot. Always has been. One wonders how he gets re-elected when in fact he should be sitting down on the other side of the table and questioned--under oath--about mortgage fraud at both Fannie and Freddie and their bailout by the American people.
Barney Frank is a "clear and present danger" and should be impeached.
He should be sodomized...but he would like that.
HERE HERE!