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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (46646)	2/24/2004 11:55:28 PM
From: Rolla Coasta	Read Replies (1) \| Respond to of 74559

Good for you Jay :O), it's also good to hear you'd escaped from your vacation home in Philipines. That place is just dangerous... Man, where's the safest place on earth ? regards, QPK

To: TobagoJack who wrote (46646)	2/25/2004 12:43:07 AM
From: Maurice Winn	Respond to of 74559

Uncle Al KBE lining up to put the kibosh on the Fannies. nytimes.com How about this Jay? Our great and estimable idol heading off another problem at the pass. <WASHINGTON, Feb. 24 — Alan Greenspan, chairman of the Federal Reserve, warned today that the nation's two government-sponsored mortgage institutions posed a "systemic risk" that could cost taxpayers dearly in the future. Fannie Mae and Freddie Mac, which buy and package billions of dollars worth of mortgages every year, now hold roughly $2 trillion in debt, and Mr. Greenspan asserted that they were not in a position to protect themselves adequately from the risk of that debt in anticipation of a future financial crisis. The Fed chairman said both institutions were able to borrow money at lower rates than other financial institutions because investors believe the federal government would bail them out if they ran into serious trouble. Mr. Greenspan argued that the two companies, which indirectly finance a huge share of the nation's home mortgages, have become riskier by virtue of their own increased borrowing over the years and would be better off if they were treated no differently than other financial institutions. Even though the Fannie Mae and Freddie Mac are both for-profit corporations, listed on the New York Stock Exchange, Mr. Greenspan said the two companies receive a huge "implied subsidy" by virtue of their special status as "government-sponsored enterprises." "There is a general belief in the marketplace that these securities are backed by the full faith and credit of the United States government, even though they're explicitly not so stated," Mr. Greenspan testified at a hearing of the Senate Banking Committee. "It's basically creating an abnormality, which the system cannot close around, and the potential of that is a systemic risk in — sometime in the future if they continue to increase at the rate at which they are." Congress and the Bush administration have been wrestling for months over the best way to regulate the two institutions, which have seen their loan portfolios soar to at least $1.75 trillion from $223 billion in 1992, making them by far the nation's largest mortgage buyers of home mortgages. The two institutions have been embroiled in accusations of questionable accounting practices over the past two years. The Treasury Department is pushing to take over the regulation of both companies and impose tougher requirements on issues like capitalization and operating practices. Fannie Mae officials quickly lashed back at Mr. Greenspan, complaining that many of Mr. Greenspan's criticisms were based on a Federal Reserve study that it called "seriously flawed." "We, of course, disagree with most of his conclusions," said Jayne Shontell, Fannie Mae's senior vice president for investor relations. "We believe that the testimony does not appreciate the role for our mortgage portfolio and the impact of his proposal." > Mqurice

To: TobagoJack who wrote (46646)	2/25/2004 3:16:47 AM
From: energyplay	Read Replies (2) \| Respond to of 74559

Instead of a dollar collapse, imagine a USD which is worth about 30-50% less. Euro would be about $1.70 JPY about 80 for a dollar - about the 20-30 year high. Gold at $550 Copper at $1.80 Oil at $45 to $50, gasoline retail at about $3.00 At those levels, current account defict will be close to zero in 2-3 years, maybe small surplus. With more US domestic sales replacing imports, tax revenues will rise , reducing federal level deficts. With about 20-30% domestic inflation, tax revenues for local, state and federal governments will increase, an effective tax increase, reducing deficts even more.