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Old 09-08-2008, 01:04 PM   #61
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After thinking it over, I have to admit its a neat trick to peel off a hunk of government, make it a publicly investable entity, take in billions of investors money, have a bunch of executives strip millions of dollars out of it, get the government to take over whats left of the husk when the whole scheme crashes down and use taxpayer money to reinflate it, then give fat separation packages to the guys who did the deed.
Yes - quite a slick trick!

It's all very well to call for privatization of government functions, but unless you completely cut the umbilical cord, as long as there is some type of implied government backing, then the above story is probably the inevitable result.

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Old 09-08-2008, 03:51 PM   #62
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http://www.bloomberg.com/apps/news?p...2lQ&refer=home

This is either really, really bad or nothing at all. I'm not sure which yet.
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Old 09-08-2008, 04:31 PM   #63
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Curled into a little ball-sucking my thumb

All- I'm obviously not ready for retirement or investing or even writing a check. I joined this forum with the fantasy of educating myself, to see if I could retire early. Now I'm scared s!$$less and I have even more questions.

I found out this weekend my very ill mother has 300k plus in a PIMCO bond fund. Am I happy or sad about the Fannie Mae bailout? She also has 200K in market rate securities. Her UBS "advisor" put her in those. I THINK she is okay with both those positions.

I have a large portion of my 401K in a Dodge and Cox stock fund. Is it hide the knives time?

The question I really want to ask is this: This thread has shown articles that the Dodge and Cox fund has a large position in Fannie mae stock and now is theoretically worthless (bad for me). However, when I go to the D and C fund snapshot on MSN or Morningstar there is no mention of the Fannie Mae stock among the top holdings. Who's lying to me? Did D and C unload 59,000,000 shares of Fannie Mae today? I kind of hope so. After the last 2 years I'm thinking of working until age 82. Just kidding. I THINK I'm diversified and I THINK I'm willing to weather the storm. Grey hair and no hair are the price I will pay.
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Old 09-08-2008, 04:43 PM   #64
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IMO - The govt probably needed to step in... we probably have not heard all of it yet.

It restored confidence and may help the mortgage markets and the stock market.

But the positive part of the story ends there. The people running those companies were at best negligent... perhaps worse.

Shareholder of those companies, Stockholders in general, and taxpayers go the shaft.

The company management made millions. Where is all of that corporate governance that was supposed to be in place after SOX.

I think several of those people are going to Jail. We can only hope!
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Old 09-08-2008, 05:06 PM   #65
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Not only did the executives make tens of millions with their superb management skills, they spent about 170 million lobbying congress to maintain lax oversight regulations.

Yes, these crooks need to be tried and convicted of fraud and sent to a white collar country club retirement prison
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Old 09-08-2008, 05:37 PM   #66
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I remember around late 2003/early 2004 all the financial porn rags and the tv screamers were insisting that everyone should make huge investments in fannie and freddie.
See also Peter Lynch's advice in Beating the Street (1993), pp. 263 et seq.
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Old 09-08-2008, 08:32 PM   #67
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I have a large portion of my 401K in a Dodge and Cox stock fund. Is it hide the knives time?

The question I really want to ask is this: This thread has shown articles that the Dodge and Cox fund has a large position in Fannie mae stock and now is theoretically worthless (bad for me). However, when I go to the D and C fund snapshot on MSN or Morningstar there is no mention of the Fannie Mae stock among the top holdings. Who's lying to me? Did D and C unload 59,000,000 shares of Fannie Mae today? I kind of hope so. After the last 2 years I'm thinking of working until age 82. Just kidding. I THINK I'm diversified and I THINK I'm willing to weather the storm. Grey hair and no hair are the price I will pay.
Don't worry about it! DODGX was up 1.64% today, so no matter how much of a hit it took on FF, other things in the fund overwhelmed the effect. Sure, it could have been up more without that holding, but it's far cry from the drastic downdraft so cheerily predicted by so many articles.

Article writers often miss the forest for looking at a single tree.

Audrey
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Old 09-08-2008, 11:40 PM   #68
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The CEO's and any culpable management should end up in jail.
So should Paulson & Bernanke, but this move is one more designed to bailout the people at the top.



Who do you think will pay for this action?
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Citi bank thinks FNM and FRE are worth $0.32 and $0.31/sh
Old 09-09-2008, 12:05 AM   #69
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Citi bank thinks FNM and FRE are worth $0.32 and $0.31/sh

StreetInsider.com - Citi Downgrades Fannie Mae (FNM) and Freddie Mac (FRE) to Sell
Quote:
Citi analyst says, <SNIP> Accordingly, we believe the shares of FNM and FRE are worth $0.32 and $0.31, respectively."
FNM $0.73/sh -6.31 -89.63%
Volume: 585,655,893

FRE $0.88/sh

-4.22 -82.75%
Volume: 370,021,420
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Old 09-09-2008, 12:17 AM   #70
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Here is a bit more information explaining why I switched to a picture of Ole Karl for my avatar.


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Old 09-09-2008, 02:19 AM   #71
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Apparently the fraud has been going on for quite a while. How is it that these jerks were not prosecuted?

http://www.washingtonpost.com/wp-dyn...2300184_2.html


This issues with Freddie and Fannie is serious. Even though the market rallied a bit... that only occurred because the feds took them over and it was a sigh of relief.

There is a fundamental problem with our financial system. All of us will recover... and spreading out the losses amongst all investors and tax payers spreads the pain. But lets not forget that some sorry opportunists rip us off and put the nation in a tail spin. We will be paying for this for year.

Consider how the losses ($) could have been used by you and the govt for more positive purposes than fixing problems those @$$h0l3s created.
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Old 09-09-2008, 06:26 AM   #72
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Standby our Great Congress is back at work - They are taking up the "great Mortgage crisis" as we type. What will come out of that will be a "big CHANGE" - hope we can afford it.

Personally, I do not think I should pay for this fiasco but that is JMHO as I have not had a mortgage to purchase a home for the past 33 years and do not ever intend to use one to purchase a place to live the rest of my life. HELOC yes, purchase mortgage NO.
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Old 09-09-2008, 09:45 AM   #73
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Just try hard to not pay any taxes over the next 5-10 years and you'll be fine!
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Old 09-09-2008, 11:19 AM   #74
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Just try hard to not pay any taxes over the next 5-10 years and you'll be fine!
Thanks but Military Retirement makes that totally impossible. But, since I repaid my SS (to retake it at age 70) this year (2008 Taxes) I will be getting upwards of a $10K refund for previous taxes paid on SS.
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Old 09-09-2008, 11:36 AM   #75
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But, since I repaid my SS (to retake it at age 70) this year (2008 Taxes) I will be getting upwards of a $10K refund for previous taxes paid on SS.
OAG, a bit off topic, but when we discussed this on other threads, IIRC, you pointed out that one had a choice to take a deduction on Sched A for the repaid amount, or go back and figure out the past taxes paid on the SS income. Does this mean you plan to file amended returns for all those years?
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Old 09-09-2008, 12:39 PM   #76
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The two CEOs are being fired. I hope they do not get a golden parachute.
Big Severance Packages Await Fannie, Freddie CEOs : NPR
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Old 09-09-2008, 02:24 PM   #77
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Takes a former baseball player to have some common sense. Jim Bunning comments that Paulson assured them in July they'd never need add capital to Fannie and Freddie the assurance they could would save the day.

First this shows how little control the top executives in the Treasury and Fed actually have in turning around the situation.


http://www.bloomberg.com/apps/news?p...upI&refer=home
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Old 09-09-2008, 02:28 PM   #78
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OAG, a bit off topic, but when we discussed this on other threads, IIRC, you pointed out that one had a choice to take a deduction on Sched A for the repaid amount, or go back and figure out the past taxes paid on the SS income. Does this mean you plan to file amended returns for all those years?
Just to clear this up the choices are EITHER an Itemized Deduction (for the difference in benefits receive less the amount of the repayment paid) on Schedule A OR CREDIT (for ACTUAL TAXES paid on past benefits) on Line (70 or 71) I forgot which line. NO Amended returns. In my case I will take the Itemized deduction for the NET difference in SS received this year less the repayment as it results in the greater refund (which one you can take is optional and IRS recommends you figure it BOTH ways and then take the best one (for you)).
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Old 09-09-2008, 02:47 PM   #79
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Just to clear this up the choices are EITHER an Itemized Deduction (for the difference in benefits receive less the amount of the repayment paid) on Schedule A OR CREDIT (for ACTUAL TAXES paid on past benefits) on Line (70 or 71) I forgot which line. NO Amended returns. In my case I will take the Itemized deduction for the NET difference in SS received this year less the repayment as it results in the greater refund (which one you can take is optional and IRS recommends you figure it BOTH ways and then take the best one (for you)).
Thanks, OAG
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Old 09-09-2008, 07:12 PM   #80
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An article in the local paper today was pointing out the policy question that this brings up: What is the government's criteria for taking over such companies? It pointed out that the big auto companies and big airline companies are asking Congress for special loan packages.

Last night on Nightly Business Report they said that 30 year mortgages dropped about 40 basis points on the news.

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