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Paulson Takes Control of Fannie and FreddiePublished 09/07/08 Alexia Cameron - Print ArticleE-mail - editor@economyincisis.org The government is preparing to place Fannie Mae and Freddie Mac under federal control after a review found the mortgage-finance companies used accounting methods that inflated their capital, according to Bloomberg. Treasury Secretary Henry M. Paulson Jr. is expected to hold a press conference Sunday, according to a statement. The Bush administration called in top executives from the mortgage giants Friday afternoon to inform them of the government’s plan to put the troubled companies into a conservatorship. The massive potential of liabilities could cost taxpayers $25 billion, making the rescue among the largest in the nations history, according to the New York Times. The executives were told they and their boards would be replaced and shareholders would be virtually wiped out. However, the companies will be able to continue to function with the government standing behind their debt. Under the conservatorship, shares will be reduced to little or nothing, and all losses on mortgages will be paid by taxpayers. The conservatorship will basically be a prepackaged bankruptcy, similar to what smaller companies use to clean up their books in order to emerge with stronger balance sheets afterwards. Administration officials have grappled with the deterioration of the mortgage finance behemoths for months. With the presidential election steadily approaching, apparently government officials decided it would be better to act now than in the upcoming months. Five weeks ago, President Bush signed a law to give the administration the authority to pump billions of dollars into the companies through investment loans. Paulson said that he had absolutely no plan to provide any loans or investments, and that merely giving the government the authority to backstop the companies would provide a strong boost of confidence to the markets. However, the waning capital reserves that have kept the two companies afloat have continued to erode as the housing market has steadily declined and the number of foreclosures has soared. Critics believe the open-ended rescue package could expose taxpayers to billions in losses. The government takeover of Fannie and Freddie willl be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares. Source Bloomberg:
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are also the most single most abused and lied to group of people who haven't quite figured it out.
The US government seems to have morphed into a Fascist form existing only to steal from the taxpayers (both present and future), and perpetuate fraud and corruption in the mortgage business, create and perpetuate wars of convenience, trample civil rights through executive privelege and the Patriot Act, break the Consitution, offshore jobs, and complain that the people of the nation are just a bunch of whiners.
People wake up! Look what's happening to your country. It has happened before in both Germany and Italy during the 1930's.
Learn from history. Don't repeat mistakes of other failed governments.
FDR quotes: "Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a President and senators and congressmen and government officials, but the voters of this country. "
and
Mussolini said: "Fascism should rightly be called Corporatism, as it is the merger of corporate and government power."
Benito Mussolini
Lenin said:"Fascism is capitalism in decay."
Vladimir Lenin
Henry Wallace said: " Fascism is a worldwide disease. Its greatest threat to the United States will come after the war, either via Latin America or within the United States itself."
Henry A. Wallace
Sinclair Lewis said: "When fascism comes to America, it will be wrapped in the flag and carrying the cross: Sinclair Lewis (and a Star of David)"
Bill Moyers said: "Big money and big business, corporations and commerce, are again the undisputed overlords of politics and government. The White House, the Congress and, increasingly, the judiciary, reflect their interests. We appear to have a government run by remote control from the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Petroleum Institute. To hell with everyone else: Bill Moyers - PBS
Bertrand Russell said: "The first step in a fascist movement is the combination under an energetic leader of a number of men who possess more than the average share of leisure, brutality, and stupidity. The next step is to fascinate fools and muzzle the intelligent, by emotional excitement on the one hand and terrorism on the other." Bertrand Russell Freedom, Harcourt Brace, 1940
and finally FDR again: "Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people. The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of a private power to a point where it becomes stronger than the democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group, or by any other controlling private power. FDR: message to Congress proposing the monopoly investigation, 1938