PPT has a busy weekend


Not much time was spent on the golf course this weekend for members of the Plunge Protection Team. Today’s announcement of a support plan for Fannie Mae and Freddie Mac follows another grim week on Wall Street. Hank Paulson and Ben Bernanke faced the impending meltdown of Fannie Mae and Freddie Mac with the only real tools at their disposal: expanded borrowing authority from the Fed, and, pending Congressional approval, direct government ownership of equity shares in the mortgage giants.

“Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owner companies,” Paulson said Sunday. “Their support for the housing market is particuarly important as we work through the current housing correction.”

Last week’s market volatility culminated with a large-scale bank failure, numerous 52-week lows on the Dow, and the CEO’s of America’s largest financials wondering when and if the bloodletting would end.

Just one blogger’s guess, but I expect a strong market rally next week as news of the support plan for Fannie and Freddie gives a much needed shot of confidence to beleaguered investors. Hopefully, Congress will take a very close look at this and demand that government’s ownership positions will be both limited and temporary. I can dream, can’t I?

Update:
from WSJ

The federal government’s seizure of IndyMac Bank is deepening worries among executives, regulators and consumers about the U.S. banking industry, which is in a tightening bind following a long run of prosperity.

Banks and thrifts are struggling against a rising tide of bad loans, and it is becoming increasingly clear that some lenders won’t be able to dig their way out. While fewer banks are expected to fail than the 834 that went under from 1990 to 1992, it will likely take several years for battered financial institutions to work through their bad loans and replenish their depleted capital.

It may take longer than that. The BOGNONBR graph has been updated since our last look, and the trend shows no indication of changing direction. Quite the contrary: a 15% decrease in non-borrowed reserves from the previous month.

Update 2:

a grim assessment from UK Telegraph, predicts “de facto nationalisation of the banking systems in the US, Britain and Europe.”

I might have to reconsider my “Monday Rally” prediction.

One Response

  1. I agree with some of the alleged experts I heard last week, that Freddie and Fannie cannot be allowed to collapse. Not with those two being the largest mortgage holders in the country.
    I seldom favor government bail-outs, but am realistic to know that sometimes it’s the only way…the alternative is too bleak.
    I’m not in the forecasting or prediction business, but if I were, I would predict nothing happens to the Senator from NY, Chuck the Schmuck, for causing the run on the IndyMac.

Comments are closed.

Crazy Green Thumb's

Chronicling a delusional gardening experience.

Big Jew on a Diet

nothing tastes as good as skinny feels (apart from butter) - Kate Moss

Show Must Go On!!!

- On with the Show

My Foray Into Food Storage

A regular gal learning about Food Storage, Home Cooking, Canning, Gardening, and more!

Nuke's -- n2l's

execution watch

rmactsc

Survival Considerations When The SHTF

Courtesy Girl Keeps It Real

Modern. Southern. Sharp.

Right of Mississippi

82.7% Correct on Mississippi Politics So Far!

Attenti al Lupo

www.attentiallupo2012.com

Among The Joshua Trees

Take my love, take my land. Take me where I cannot stand. I don't care, I'm still free. You can't take the sky from me. Take me out to the black. Tell them I ain't coming back. Burn the land and boil the sea. You can't take the sky from me. There's no place I can be Since I've found Serenity......But you can't take the sky from me.

Past, Present, & Future

Just another WordPress.com weblog

Matt on Not-WordPress

Stuff and things.

Western Rifle Shooters Association

In the absence of orders, go find something evil and kill it.

John Jacob H's RKBA Commentary

A well regulated Militia being necessary to the security of a free state, the right of the People to keep and bear arms shall not be infringed.

Samina's Forum for police support

A great forum of promotion of friendship and co-operation between citizens and Police Officers. Come join us.

stillness of heart

MUSINGS : CRITICISM : HISTORY : PASSION

Don Charisma

because anything is possible with Charisma

StopAndPrayTV

To Give Hope and Encouragement through the Word of God

Christian Spook

THE KING JAMES BIBLE ONLY !! Exposing the false teachings of those purporting to be Christian's, exposing new false doctrines and practices,and sharing as much information on cults as possible.Including, Jehovahs Witnesses,roman catholicism,Islam,mormonism,christadelphians, Jesuits, Illuminati,i.e....The Whore of Babylon. Please send me posts to relevant articles, and useful websites. Thank You.

Follow

Get every new post delivered to your Inbox.

Join 291 other followers

%d bloggers like this: