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American Capital Agency Corp. Message Board

  • herexhear herexhear Jan 15, 2014 4:18 PM Flag

    For raybans and those who were off-planet in 08109

    Bear starns started the meltdown. The firm which had been valued at 50plus per share a few months previous was strong armed by Republican Henry Paulsen to accept a few bucks a share.

    As the crash accelerated, virtually all sub prime lenders vaporized - WAMU, WACHO, INDYMAC.

    Paulsen forced the prepackaged liquidation of these firms.

    Pennies on the dollar or total loss was the norm for owners of these firms.

    Then in sept, Paulsen nationalized Freddie Mac and Fannie Mae with the cramdown of preferred shares causing equity value to plummet to around 5 percent of the pre crash values.

    A week later, Lehman fell, with owners experiencing a total loss.

    Within a month or so, Paulsen made one of the most hysterical appearances of all time on Face the Nation, in an attempt to stave off Congresses rejection of TARP.

    Once TARP went in, Paulsen dolled out billions to financial institutions and GM and GE with the explicit understanding that each firm had ONE chance and any return for help would require the same catastrophic loss of equity as experienced by the pre-TARP victims of the crash.

    In January the new administration prepared to enforce Paulsen's warning.

    While GM was forced into a prepacked bankruptcy, a consensus for nationalization of the big banks was rapidly built culminating in retired Greenspan capping it off with his agreement that such banks could go the way of Fannie and Freddie if they failed to meet a Capital sufficiency test that was to be administered in March or April I believe.

    The rapid prepack of the Stimulus bill, GM bankruptcy and the passing of the capital tests by the majority of the big banks marked the end of the crash.

    If the big banks had failed the tests en masse, they would have been nationalized like F and F.

    During the crises and to this day, guys like Raybans only response to this historical events is to identify people he does not like and blame them for it, which is the fundamental impulse of the conservative mentalIty.

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    • It actually started a long time before that, back in 2004. Remember, the red hot real estate market in 2000 - 2003, example Florida had back to back years with 20%+ increases in prices in 2002 & 2003 from the 1% FED FUND RATES. The melt-down started real quietly in June 30, 2004, when people and entities playing the yield spread got stunned with the FED FUND rate increase. After five straight increases in 2004, I knew then that I had better sell my home, my lord, the price rose from $185,000 in 2002, to 285,000 in 2004 and in 2005 they were selling fast at 399,000 -405,000, that was the top in RE single family in my subdivision, it was down to $355,000 in June 2005, prices were in free fall, but the media and markets still acted like everything was OKie DOkie. It wasn't. I started to sell my banks stocks the summer of 2006, 100% cash in those. 2015-2016 should look something like this:
      FED FUND RATES:
      June 25, 2003 1.00
      June 30, 2004 1.25
      August 10, 2004 1.50
      September 21, 2004 1.75
      November 10, 2004 2.00
      December 14, 2004 2.25
      February 2, 2005 2.50
      March 22, 2005 2.75
      May 3, 2005 3.00
      June 30, 2005 3.25
      August 9, 2005 3.50
      September 20, 2005 3.75
      November 1, 2005 4.00
      December 13, 2005 4.25
      January 31, 2006 4.50
      March 28, 2006 4.75
      May 10, 2006 5.00
      June 29, 2006 5.25

    • You forgot KEY player AIG ,that insured the worlds mess, was busted!

    • The government bought stocks in the companies as a special stock offering and then several years later sold them back to the market at a profit in most cases and at a profit on average over all so it not only did not cost the tax payers but it was a good investment. In the end these companies were given nothing that they did not return back to the government. That is what the fed or treasury did under Bush.

      Obama on the other hand took the second half the TARP money that Bush left for him to spend and started to divy it out as freebies to people who were under water on their mortgages, many of which had taken out loans on their homes so they could foreclose and then keep the money they borrowed at no cost to them. Obama helped them accomplish this ruse and he feels no remorse about it.

      I heard of one guy who borrowed enough money on his home to buy another home free and clear and then when his home went down in value used Obama's freebie money to renegotiate the loan down to something less than the home was worth and then he sold it. In the end he had a new home with no payment thanks to Obama. Did the American tax payer get any of this money back? Not a dime of it. Is Obama making any attempt to go after these scammers? Not at all. He is fine with the end result because I suspect he figures it's OK what happened. It meets his low standards.

      The difference between the two cases was the inherent accountability or the lack of it in the latter case. It is a case of responsible government vs irresponsible government, accountability vs no accountability, or in the latter case, government gone wild.

    • Wrong board; Inept interpretation besides.!!

 
AGNC
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