September 8, 2008 by Frank Lynch.

Herb Allison,, former president of Merrill  Lynch, is the government appointed head of Fannie Mae.

i have been observing for some time that trading in both Fannie Mae and Freddie Mac should have been suspended because any financial analyst with even a broken pencil could see that both companies were grossly insolvent.

Merrill Lynch, Goldman Sachs, and all the brokers have at least one sharp pencil buried beneath the salesmen, and should have reasonably known of the de facto insolvency. They should have advised their customers that these firms were insolvent.

Trial lawyers, paradise is here!

The potential liability is huge to Merrill Lynch for continuing trading these stocks and permitting their customers to buy them through Merrill Lynch, earning excessive commissions for Merrill. The lower a stock price, the higher the commission as a percent of the trade.

Now the former president of one of the firms who did hundreds of billions of trading in the bad paper is in charge of Fannie Mae?

Is there no Shame?

There certainly is no honor left in American finance ad its regulators.

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September 8, 2008 by Frank Lynch.

It was during the mid 1970’s that Fannie Mae started the widespread issuance of MBS or mortgage backed securities which were a giant fraud that built upon itself every year through the administrations of both parties.

The sham is that banks sell bad loans to Fannie who then resells them as triple A absolutely safe MBS, essentially letting the banks take the profits and the taxpayers take the risk and the losses.

As banks did this more and more, running a printing press that used this back door to let banks write government guaranteed mortgages, it fed upon itself like a cancer.

For 30 years, as both the Presidency and control of Congress shifted back and forth between both political parties, and back and forth again so that every elected official of all parties are guilty, this cancer grew, fed by bank contributions to every elected official in America, until it not only transferred $800 billion in new national debt to the taxpayers, and it has destroyed our economy.

This bailout is like cutting the tail off a dog one inch a month instead of all at once.

There will be headlines continuously as we taxpayers inject more and more capital into Fannie and Freddie.

We should, instead, just put them out of their misery and return all mortgage financing entirely to the banks and savings and loans, with no government involvement whatsoever.

This is nothing but creeping socialism.

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September 8, 2008 by Frank Lynch.

Paulson’s bailout of Fannie Mae and Freddie Mac just returned the $376,000,000,000 of their debt owned by the Chi Coms to AAA status, and guaranteed Communist China will collect every penny of principal and interest.

 Isn’t our government great?

Wait for your tax increase to pay for it.

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