Arkady's Thoughts

This seems like a relevant story, because we have not heard much from either Freddie or Fannie - two institutions that are dead center in the entire housing/financial collapse. This morning the former CFO committed suicide . David Kellerman was only 41 and while it's possible that personal issues could have played a role, right now it is safe to speculate that whatever mistakes Freddie made during the past few years could have generated enough guilt. I have no intention in trivializing the death of a human being or making such a serious matter political, one is left wondering just how dirty and corrupt the entire relationship between Fannie/Freddie and the government was. Specifically their operating margins that made Bear Sterns look like a walk in the park, blatant lobbying of Democrats and some Republicans, guarantee from the government to back them with taxpayer money no matter the failure and their social engineering practices. Barney Frank can certainly blow wind on capitol...

A story in NY Times today suggests that plans by the administration will be unveiled soon detailing the most far reaching and intrusive regulations to date. The first sentence of the story sets the tone for what is sure to be a highly contested and controversial proposal. "The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan" With this introduction, banks and similar institutions that do not fall under the auspices of the TARP plan will be subjected to government oversight in all matters of compensation. Essentially our government will now be in charge of determining decisions currently being decided by industry experts and regardless of what noble intentions Obama has in mind, this cannot possibly end well. This kind of intervention may very well have devastating results in the form of talent fleeing the industry and seeking employment in other countries or simpl...

The first 250 billion is now being allocated. So far I have mixed feelings about this. I am elated that they are not buying up garbage (toxic) mortgages and instead using the money to inject the banks with liquidity. This is important as it guarantees their solvency and that banks will continue to operate. This should alleviate the credit crunch that is precisely what is grinding our economy into a halt. I assume however that this ownership is a temporary measure. We do not want our govt to dictate the bank's policies - that will be a disaster. If they plan to do the same thing as Japan did, at the very least they can learn from Japan's mistakes. Nationalizing banks must be a swift and temporary measure to provide confidence and a source of security to the ailing banks. Buying up mortages is the worst thing they can do because it just rewards bad behavior. I heard talks that some Democrats proposed refinancing loans to a new lower adjusted rate. This is horse shit and ...