Sunday, September 14, 2008
Response from Sherrod Brown... Another 3-0 Weekend!!! LEH... Am I a Patriot?
Dear Mr. Davis:
Thank you for contacting me regarding the recent government takeover of Fannie Mae and Freddie Mac.
The U.S. Government recently seized control of the mortgage companies, placing them into a government conservatorship under the Federal Housing Finance Agency (FHFA). Congress gave broad authority to the FHFA and the Secretary of Treasury in July because it anticipated that the two companies might be unable to recover on their own given the downturns in the housing and credit markets.
While I had hoped that further intervention would not be necessary, Fannie Mae and Freddie Mac play too big a role in our economy to allow them to fail. They own or back more than $5 trillion in mortgages, and play a vital role in keeping mortgages affordable, particularly in tough times like todays. But the particulars of the Administration's actions deserve close scrutiny.
Over the weeks and months ahead, we will need to consider how to restructure these companies for the long term so that they can fill the important function of maintaining mortgage lending at reasonable prices without putting taxpayer dollars at risk.
As this issue continues to be discussed, I will certainly keep your views in mind. Thank you again for writing.
Sherrod Brown is 3 for 3 with me. I have written three letters and have received three responses from him. It just goes to show readers that at least somebody is working in D.C.. LaTourette has responded to me once, and that was to a hand written letter I delivered to him in the Capital Rotunda. Evidently, George Voinovich has lost my email address, my snail mail address, or just doesn't care to respond... Maybe that is a signal that he will not run again when his term expires.
I will send a follow-up letter to all three Congressmen suggesting that a formal investigation be made on the collateral that banks are using when they access the discount window. If... if Obama has any chance of winning this election, his camp will need to demonstrate a degree of collusion between the Treasury Department, Wall Street, and the big banks. Now that is a debate topic or an advertisement I would like to hear.
Another 3-0 Week
For those of you who are following the Tiger Coach's Picks, you were treated to another 3-0 sweep as Missouri made another case for a top five rating, Penn State whipped the hapless Orangemen of Syracuse, and the Wisconsin Badgers won outright over Fresno State. This brings my season total to a 7-2 mark. The dime better is up an easy 48 K!!!
This could well be the last call for LEH as traders prepare to push it right over the cliff into insolvency. If that were to happen, LEH is guilty of falling on their own sword. Nobody, and I do mean nobody caused this to happen except Fuld and friends. As mentioned in my previous post (The one that has the blond saying buy me), there have been way too many lookers and no takers. Three solid days of meetings this weekend with Treasury and the NY Fed, and still no takers. Either the books are CHERNOYBL level radioactive, or the street is getting one pulled over on them. Futures are down over 350 points as I write. However, I would not be surprised if an announcement is made before the market opens to save LEH... and give all the Asian traders a bath!!! If that happens, you heard it here first!
Posted by at 12:27 PM