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Reduce Reserves, That'll Fix It



February 28, 2008 – Comments (5)

How do these things happen? 

I'm reading Moody's says may cut Fannie Mae financial strength and with Fannie Mae losing a couple more billion dollars than those expert analysts predicted, you know, the same ones that also predict the second half the year will be good.

So, this is what happens when people aren't looking:

"However Moody's said that its concerns were partially mitigated by news that regulator the Office of Federal Housing Enterprise Oversight may decrease the amount of surplus capital required to be held, reducing the probability Fannie Mae would breach the minimum."

We should not have to live our lives watching these idiots under a microscope for their never ending moves to negligence, incompetence and corruption.

Reserve requirements are there for a reason.  Reducing them does not improve financial strength, IT DECREASES IT and this is just f---ing window dressing that puts tax payers at higher risk, along with some of the other recent moves. 

With all the s--t that's happening, regulators should be stepping in and freezing dividends and until balance sheets are fixed, which with the gross level of problematic debt out there will take a few years for it to all be identified, never mind for it to all be written off and balance sheets fixed.


5 Comments – Post Your Own

#1) On February 28, 2008 at 9:24 AM, floridabuilder2 (98.77) wrote:

wow.........  dwot dropping the F bomb........ alright welcome to the club..........  this is by the way such BS just like the AAA on ABK and MBI.........  this is the reason why the internet is so important vs. the 80s when you could get whacked over the head and never see it coming

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#2) On February 28, 2008 at 9:31 AM, devoish (86.34) wrote:

So if you had the chance to speak before Congress would you want to say something like this?

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#3) On February 28, 2008 at 9:43 AM, dwot (29.67) wrote:

Reading today

 "The credit crunch is unprecedented, far worse than the S&:L collapse and Long Term Capital Management  -- combined.

All of these factors have combined to create our present situation. Inflation remains very elevated and worse, quite sticky. Growth continues to slide towards zero -- and possibly beyond."


"What is particularly worrisome to me is that as we have slashed interest rates 225 basis points, consumer loans -- mortgages and revolving credit -- have actually moved higher.

Gentleman, this is a major problem. And our internal, non-public projections forcast it is only going to get worse for the next 4 quarters . . . "

This is so criminal.  This is so disgusting. 

My re-write

Six Degrees of Leverage 


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#4) On February 28, 2008 at 10:37 AM, FourthAxis (< 20) wrote:

Great find.  Great Post.  Do you read Mish?

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#5) On February 28, 2008 at 2:14 PM, AnomaLee (28.53) wrote:

I can't even joke about your bearishness here.... 

This news actually helped moved the market higher yesterday. Today, Ben Bernanke took a dump on all those optimist when he said he could see banks failing....


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