Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (156918)	3/24/2002 3:00:40 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 436258

We have continued to question the huge leverage in Fannie Mae and Freddie Mac and their murky disclosure of their unbelievable derivative positions. A major mistake and both agencies could become another S&L fiasco, only this time it won’t be $500 billion lost but $2.5 trillion and we’ll again get to pay for it because the elitists instruct them to flood our country with sub-prime loans to buoy a collapsing financial system. It’s also very questionable that Fannie Mae and Freddie Mac are not required to file quarterly insider trading reports. They are not subject to any SEC enforcement unless fraud is discovered. As you can see some are more equal than others. Both agencies have 18 member boards of directors, five of whom are political appointees made by the president. We consider most of the appointees incompetent to discharge their duties and their only reason for being there is to fulfill the economic agenda of the elitists. The two biggest mortgage holders in the country are allowed to pile up debt and manipulate the housing lending market. That debt is implicitly guaranteed by taxpayers, without being held to even the minimum of corporate, governance standards that every other publicly traded company has to observe. When this house of cards collapses the effect will devastate our economy. Fannie Mae plans to issue $225 billion in long-term debt this year. Freddie has similar plans. That means they will issue over $500 billion in new paper. They expand with abandon. Treasury Secretary, Paul O’Neill, is considering borrowing billions of dollars from federal employee retirement funds as a way of avoiding a clash with Congress over legislation to raise the federal debt limit. Robert Rubin used a similar tactic in 1995-6. It will be interesting to see the reaction to this smoke and mirrors move in our current Enronized world. If the move isn’t made the nation could go into default. We find it of great interest that businesses do the same slight-of-hand and go bankrupt, but our government can do anything it wants. There are no rules. Japanese depositors taking funds out of banks and buying gold will mean banks will have to hold funds in Japan to meet liquidity needs. That means there will be less US equities purchased which will affect both our stock and bond markets. The FOMC meeting was a non-event to some but we saw a very concerned Alan Greenspan. His entire speech was not bullish. In fact, it was full of very serious warnings and included a very serious warning about derivatives. He, of course, couched his warnings and was anything but bullish. The US economy is headed for major budget deficits, which this time will compound many other fiscal and monetary problems. Official policy is that of the FED, which dictates financial policy to the US Treasury. The recent shift to trade barriers regarding steel should be the beginning of the end for free trade, as we’ve known it for the past 20 years. The termination of this policy will inhibit the ability of foreign markets to accumulate dollars. That will cut off foreign investment in US markets, drive the dollar down to normal levels and push the price of gold upward. It also means higher interest rates, which will not be the result a recovering economy but the consequence of monetary debauchery. That means higher worldwide rates and pressure resulting in diminished world trade. That means the stock market will not be able to sustain excessive share valuations and the myth of improved productivity will be exposed for the lie it is. All the lies will become manifest soon and the people will be forced to suffer the consequences. Monetary policy is being allowed to break down, which will be followed by a breakdown in trade and investment. Inflation will be neutralized by deflation, which has already begun. The people will lose confidence in their government and the flight to quality will begin. A flight from a debased fiat monetary unit.