Duck Rodgers
Well-Known Member
https://www.npr.org/2012/01/30/145995636/freddie-mac-betting-against-struggling-homeowners
Government high finance at its best.
Government high finance at its best.
Freddie Mac pulling a Goldman........
- Thread starter Duck Rodgers
- Start date
What do you think the implications are aside from standardized hedging? Don't get my intentions wrong Duck, I'm asking you specifically. It's annoying enough congress can enact higher fees on their paper for a tax break when there allegedly isn't anything there to keep them solvent. But how does this all come full circle?
My first guess is they wouldn't be doing any of this if good underwriting actually paid for the failure rate.
I haven't cared to read anything into this but it smells of adopting Annaly's model to me.
My first guess is they wouldn't be doing any of this if good underwriting actually paid for the failure rate.
I haven't cared to read anything into this but it smells of adopting Annaly's model to me.
Duck Rodgers
Well-Known Member
The implication is obviously that they intend to keep floating these worthless piles of garbage as long as they can. Just stop pretending, that's all I ask. Let's just let it hemorrhage itself out of existence instead of keeping it alive longer with hedges because everybody and their mom already knew they were doing it. We agree that If they are going to have churn targets, then they deserve to use hedging instruments. They are expected to perform in a way that's not even possible even today however, and apparently, they denounced the practice right after the story hit and said they aren't even going to do it anymore. How kind of them.
It's clearly just an NPR hit piece that some POS Democratic senator is going to roll out in the future decrying capitalism. But I think it's the most perfect recent illustration of absolute Monopolized insanity. If you're the market maker, you shouldn't have to hedge. But because the government puts them in a ****ing box, they know they are going to fail, so like any normal human beings, they start crapping their pants and go into hedge fund mode because they aren't going to hit their targets. It's hilarious.
The government forcing rational people into making irrational decisions is the problem with our current system. This is a great example.
It's clearly just an NPR hit piece that some POS Democratic senator is going to roll out in the future decrying capitalism. But I think it's the most perfect recent illustration of absolute Monopolized insanity. If you're the market maker, you shouldn't have to hedge. But because the government puts them in a ****ing box, they know they are going to fail, so like any normal human beings, they start crapping their pants and go into hedge fund mode because they aren't going to hit their targets. It's hilarious.
The government forcing rational people into making irrational decisions is the problem with our current system. This is a great example.
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