Jim Rogers on CNBC: embarrasses interviewers re: Fannie + Freddie
Posted July 15th, 2008 by atrickpay
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This is funny:
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they will own everything
thats there plan, to own everything to do with money in this country, therefore when they say you owe us this unfair amount of money for whatever they drum up, they just take it out of your account! and if you fight them you will be an enemy combatant!
them bastards
I think this collapse is completely planned
www.dvds4delegates.com the newest and possibly the greatest weapon the Revolution now possesses.
nothing gets past the government. This is all part of their little NAU bullshit scam. We have the Amero, woo hoo the economy is great now, all you have to do is let us destroy your sovereignty and your Constitution. Not a bad trade Mr. American.
I completely agree
it is a controlled demolition of the US economy. Peace
When will the repercussions of the buy out hit the American
people? 3 months/6/12?
i would say yes about 3
i would say yes about 3 months... and who knows how many more banks etc. are insolvent!
as for me and my home, we shall worship the LORD
"Prime" Mortgages: does it matter?
Okay, disclaimer first: I am NOT a deeply educated economist. I've got just the basics so far (so much to learn...)
Having said that, I wonder about the validity of the claim that most of those Fannie/Freddie loans are prime. That is to say, they may have been prime mortgages when they were made; they may be backed with valued collateral and made with people who had A-1 credit at that time, and may therefore be considered solid.
But if ("if" -- ha!) markets crumble, even those A-1 credit people will lose a great deal if they haven't prepared properly, and my guess is that the majority of folks have not prepared properly, since so many listen to the calming MSM reports ("Things ain't so bad, folks!"). Consequently, those who would normally make good on their loans will be completely unable to do so, and the net result would be the same as if those "prime" loans had been sub-prime junk mortgages. Make sense?
Fannie and Freddie's loans ARE prime...
Trust me on that one. It wasn't easy to get a loan approved through them. They use the older, stricter underwriting guidelines... the guidelines all banks used to use before the whole subprime market even got started... so no subprime people can slip through the cracks.
Where their trouble lies is just as you mentioned. If the economy gets so bad that even the prime people start having to default... well... we're all in a world of hurt.
They only lost a couple of billion in the first quarter of 2008. That's a loss they can handle. If gas prices keep soaring, unemployment keeps rising, the Fed keeps devaluing our currency, and the stock market has a big drop... yes... even the great Freddie/Fannie could fail.
But right now, I think they are the last of our worries in the mortgage market. Look for more failures like Indymac's though. There are still many BIG banks that made bunches of subprime loans that are going to fail... without a doubt.
True, Fannie and Freddie
True, Fannie and Freddie loans are prime. HOWEVER, just because they are labeled prime doesn't mean there wasn't some significant risk associated with some (alot) of those loans.
About five years ago both Freddie's Loan Prospector and Fannie's Desktop Underwriter software were changed to allow no income verification depending on the credit profile of the borrower (tri-merged credit report). In some cases the FICO score could be as low as 680 depending on the rest of the mortgage applicants profile.
Freddie was more daring than Fannie, though. Often, and I mean often, I had loans score A plus, which meant no income needed to be verified, through LP with a 95% DEBT TO INCOME ratio and this didn't take into account car insurance, utilities, etc...
Some shops, like Wells Fargo, which is a Freddie shop, had Alt-A loan programs where, so long as the borrowers fico was 680 they could do a SISA (stated income, stated asset) loan. In the end, they revised the FICO requirement up to 720 and the LP findings needed to be in the file. Which leads me to believe that Freddie was probably buying these as well.
I agree with you for the most part...
But the people you are talking about have good credit. They are paying their loans somehow already, and paying them on time.
You and I both know that many people don't document all their income to avoid taxes. I did many of the loans you refer to myself, but in most cases, the customers had more income than they were documenting which is why I didn't feel too bad making the loan. Besides, there is still the home as collateral, and Fannie and Freddie didn't do 100% loans with no income verification.
Also, I'm not saying Freddie and Fannie aren't going to have trouble. I just think they will be the last ones to go under. There are still plenty of subprime lenders out there... many still making subprime loans. They will fail first.
While those people did have
While those people did have good credit, they were over-leveraging themselves. I was an underwriter, not an originator. The originators at my previous company were allowed to score their loans through LP or DU before I ever saw them. Often times the originator would keep increasing the income until the loan scored A+ with no verification of income and then change the job title to make it sound good. I had a real problem with this, as you might imagine.
And, I know, at least at my previous company, that once it became apparent that the housing bubble was about to burst a whole lot of fraud was committed. If I declined the loan, it was restructured and submitted to another underwriter. When we began to let each other in the department know that these loans were being resubmitted and how they were previously structured by keeping hard copies of our underwrites, we were accused of being insubordinate. If we did the loan and it was QCd, we would get beat up because our name was on it.
Fannie and Freddie definitely got alot of garbage on their books.
Ok, Ok...
I must admit... you're right.
I saw a lot of fraud too. I just never did it myself.
There are good loan officers, and there are scammers who take advantage of a screwed up system.
But I still think that Fannie and Freddie are a lot better off than most subprime lenders, and many subprime lenders are still in business and not about to fail. Many already have... many will in the future... but I think some will survive. And I think Fannie and Freddie will survive just due to the fact that most good credit people like to keep it that way... and sometimes they keep their total income a secret.
I agree that subprime
I agree that subprime lenders are worse off than fannie and freddie. CountryWide should have failed a long time ago and BOA may because of them. The other subprime lenders that are still functioning will probably go under in due time and if they don't, then they probably sold the servicing of those loans to another party, thus limiting their exposure.
Are you familiar with this website? http://ml-implode.com/
interesting! as for me and
interesting!
as for me and my home, we shall worship the LORD
As for me and my home, we shall have spaghetti dinner.
As for me and my home, we shall have spaghetti dinner.
rAMEN.
___________
Lisa C.
“Elections are short term efforts; revolutions are long term projects.”
--Ron Paul
Join the rEVOLution here: http://www.campaignforlib...
if there is nothing to worry
if there is nothing to worry about then why all the stuff this weekend?
as for me and my home, we shall worship the LORD
the only thing i disagree
the only thing i disagree with rogers on is that the national federal government debt is almost 10 trillion.. not 5!
as for me and my home, we shall worship the LORD
I thought it was 9 trillion currently?
See this debt clock http://www.babylontoday.c...
So, where did he pull 5 trill from?
lol I rounded up.... we'll
lol I rounded up.... we'll be there soon enough!
as for me and my home, we shall worship the LORD
I've been following this guy
I've been following this guy for years and he is awesome. I went all cash when he started to get rid of his dollars. I am out of the market and am trying to convince my family to do the same with some success. They are worried about capital gains taxes, but that will soon double and they may lose more money than any amount of taxes. I have a very bad feeling about the market and,no, I am now a Whiner. I am a realist.
your also very
your also very smart!!!!!!
as for me and my home, we shall worship the LORD
I don't know about that.
I don't know about that. commodities are tricky and gold may have peaked. I know there is still money to be made out there, but that's way over my head.
Gold has not peaked..... as
Gold has not peaked..... as long as bernake prints money to bail out every investment bank, mortgage company, and to pay government obligations it will keep going up! when you see bernanke start to raise rates in a huge way likeVolcker did then its time to re figure where gold is at! that is at that time if the dollar has not been totally destoyed!
as for me and my home, we shall worship the LORD
I love this guy
I don't know if he is 100% correct but he sure is about all the criminals stealing our money. I just love how he tells it like it is.
Healthnut4freedom
"Trust in the Lord with all thine heart; and lean not unto thine own understanding. In all thy ways acknowledge Him, and He shall direct thy paths." Proverbs 3:5,6
Rogers rocks!
Rogers rocks!
lol i was laughing so hard
lol i was laughing so hard at this I missed part of it! JZ SUPERIOR INTELLECT NEFF... go to 5:20 of the video.. he answers your question dead on! I am having more fun then a person should be allowed to have!
as for me and my home, we shall worship the LORD
ROTFL........ had to watch
ROTFL........ had to watch that again.... bertha = jzneff! she makes the same exact arguments that the highly enlightened intellectual here on the daily paul makes... that is gut busting funny!
as for me and my home, we shall worship the LORD
great post Trick! i really
great post Trick! i really enjoyed watching him chew them up and spit them out! now you see where jzneff gets his info.. all the talking heads!
to funny!
as for me and my home, we shall worship the LORD
Note to Rogers
When you gain 5 trillion in debt, and 5 trillion in assets...you don't have a net 5 trillion in debt gained.
Assuming we just picked up 5 trillion in debt is assuming that none of the homes used as collateral in those mortgages have any value.
Point made, but that number is easily refuted using sound math.
lol spin spin spin... I
lol spin spin spin... I would love to see you on a tv debating Jim Rodgers
on this.. YOUR MATH IS GOOFY! Rodgers is right! smacked down again!
i'm laughing so hard right now at the way Rodgers handled those 2 talking heads my stomach is hurting! and sitting there knowing that old jz was gonna pipe up... BRILLIANT!
as for me and my home, we shall worship the LORD
I hate to disagree...
I agree with most of what Jim says. I think many banks and lending institutions are going to fail, and I don't think we should bail out any of the crooks.
But...
As a veteran of the mortgage industry, I've been a loan officer or mortgage broker off and on over the last 6 years, I've closed many a subprime loan. Fannie and Freddie do not lend to subprime customers, nor do they directly buy subprime loans. All of Freddie and Fannies direct customers have prime mortgage loans, great credit and documentable income.
Now, they do invest in mortgage securities which is one of the reasons that there is a panic. Also they are there to provide funds in situations like the one we're in now. Fannie and Freddie are required by their government regulator to have a financial cushion — cash or securities to fall back on. With losses rising, that cushion has been dwindling. That has forced them to raise new money when it has been expensive and difficult to do so. They are still able to raise money however. They have experienced losses, but they are in the couple of billion range... it's not like there have reported a $5 trillion dollar loss like Rodgers is insinuating. They are worth $5 trillion, so a loss of a few billion is not that bad in the big scope of things.
Not only that, but Fannie and Freddie aren't like normal banks. They don't have depositors that might make a run on the bank wanting their cash... they do mortgages only, and all mortgages are backed by collateral.
Now, do I think there is a problem? Hell yes. But are Fannie and Freddie the ones that are going down? I don't think so. If they are, they will be one of the last ones. They may not be able to help bail any of the other lenders out, but I don't think they will fail themselves any time soon.
All I'm trying to say is that the mortgage industry is in turmoil, yes, but I think Freddie and Fannie are the least of our worries. They are far from being an Indymac bank. I ran plenty of loans through Indymac when I was a mortgage broker (because they'd lend almost anyone enough to buy a home!), and I ran a bunch through Freddie and Fannie as well. I wouldn't loan a dime to any Indymac customer personally. Freddie and Fannie's customers I would.
interesting, then why all
interesting, then why all the trouble with freddie and fannie? so your saying its even worse then what Rogers is saying because there are others far worse??
as for me and my home, we shall worship the LORD
No...
I'm saying that there are some lenders who specialized in sub-prime loans, and some who mainly work with only prime loans.
The subprime lenders, of which there are many, are going to have serious trouble. Even the ones who did both prime and subprime loans are going to suffer because, like Indymac, once the customers start realizing there bank lends to people with shitty credit (I'd say 75% of Indymac's loans were subprime), they run on the banks... and we all know that NONE of the banks have enough money to pay all their depositors at once (or even 1/10 of all their depositors).
Freddie and Fannie are reporting losses because of the housing market and the economy in general... not because they sold or bought a bunch of subprime loans. Both companies maintain fairly stringent requirements for the mortgages they buy. They don't touch subprime mortgages or many of the exotic types of loans that helped fuel the real estate bubble. But as the mortgage market has soured, even prime borrowers — the kinds of borrowers whose loans Fannie and Freddie guarantee — have begun to default. This is where they are experiencing their losses.
They people and Freddie and Fannie insist that they do have enough capital to ride the storm... I just hope they are right. I guess the point I'm trying to make is that Freddie and Fannie aren't the lenders in the most trouble because the majority of their direct customers are prime borrowers. I'm not saying we shouldn't keep an eye on them, but they will be the last to go down imho.
It is always so refreshing to hear the truth on TV news.
Rare, very rare, but welcome.
Put Jim Rogers in RP's Cabinet
What is funny (and needed!) is how Jim speaks so frankly to the CNBC anchors on their lack of understanding. Well done, Jim. Give that man a spot in Ron Paul's cabinet. (I hope he's right about peace...)
Now the sad part:
The debt ("the" debt = taxpayers' debt) has just been doubled. Here's a quick transcript from the first few seconds of the vid:
Jim Rogers (speaking to a non-American journalist on CNBC) -- emphases are mine:
---
America's been around for 240 years or something as a Republic. In that period of time, we've built up debt of five trillion dollars, by elected officials. Now we shouldn't have, but we did.
Last weekend alone, we doubled the debt. Five trillion more. By people who are committing fraud, who are committing illegal activities, and now all of a sudden, not you, but all of us who are Americans, are going to have to pay an extra five trillion dollars in one weekend for private people who committed fraud.
---
* sigh *