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Reply #12: Senators Reject Proposal For Banks to Bail Out Fannie, Freddie [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-28-10 06:31 AM
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12. Senators Reject Proposal For Banks to Bail Out Fannie, Freddie

Senate negotiators working on the financial-regulatory bill today rejected a proposal from House Republicans that would make big banks liable for the costs of winding down Fannie Mae and Freddie Mac.

The proposal would have made the government-controlled home loan companies, which own or guarantee more than half of the $11 trillion U.S. mortgage market, part of a Wall Street-financed rainy day fund that would be used to pay for the liquidation of large failed companies.

Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat who has led the Senate side of final negotiations on the bill, called the Fannie-Freddie proposal a stall tactic.

In a letter to lawmakers today, American Bankers Association Chief Executive Officer Edward Yingling said the provision could impose a tremendous additional liability on the banking industry of hundreds of billions of dollars.

House and Senate lawmakers are in the last stages of talks on the shape of the bill that would overhaul Wall Street rules. Under the legislation, if the assets of a failing financial company werent enough to finance its liquidation, other large firms would be tapped to cover costs. House Republicans wanted to define Fannie and Freddie as financial companies under the proposal.

Until being seized by the government in September 2008, Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, operated as private companies investing in the mortgage market with an implicit government guarantee against default.

The government-sponsored enterprises were taken over by the U.S. Treasury Department when they were overwhelmed by losses linked to risky mortgages. Since then, they have been surviving on a promise of unlimited government aid, drawing $145 billion so far.

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  - A Republican take over  boomerbust   Jun-28-10 06:09 AM   #6 
     - No doubt.  ozymandius   Jun-28-10 06:15 AM   #7 
        - Krugman, of course -- OF COURSE -- says nothing about the  Tansy_Gold   Jun-28-10 08:04 AM   #46 
           - The printers in China  zogofzorkon   Jun-28-10 08:32 AM   #50 
           - Hear! Hear! We can talk about the tax levels during the Eisenhower  ozymandius   Jun-28-10 08:39 AM   #52 
           - Good points, Tansy, as always.  amandabeech   Jun-28-10 03:50 PM   #76 
              - VAT is VERY regressive,  Tansy_Gold   Jun-28-10 04:09 PM   #77 
                 - Krugman doesn't want to sit by himself in the Princeton faculty lounge. n/t  amandabeech   Jun-28-10 06:35 PM   #80 
                    - :spew: n/t  Tansy_Gold   Jun-28-10 06:50 PM   #82 
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  - At Summit, Banks Avoid New Global Regulations  Demeter   Jun-28-10 07:40 AM   #36 
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     - Soggy  Po_d Mainiac   Jun-28-10 10:09 AM   #61 
     - Just SS - and the latest opening salvo fired last Saturday, at the rigged "America Speaks"  bread_and_roses   Jun-28-10 07:19 AM   #30 
  - Senators Reject Proposal For Banks to Bail Out Fannie, Freddie  Demeter   Jun-28-10 06:31 AM   #12 
  - What's up with that?  girl gone mad   Jun-28-10 06:55 AM   #20 
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  - Angela's Secret!  Demeter   Jun-28-10 08:00 AM   #42 
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  - As someone who had her one and only child at 34 I say...  bread_and_roses   Jun-28-10 08:14 AM   #49 
  - And when do you find a father for the child?  Demeter   Jun-28-10 08:35 AM   #51 
     - A problem indeed, I concede -  bread_and_roses   Jun-28-10 08:51 AM   #54 
     - You're quite correct.  Tansy_Gold   Jun-28-10 01:42 PM   #74 
     - most men not ready for fatherhood in their 20's but I digress from stock matters  wordpix   Jun-28-10 01:07 PM   #70 
        - most men not ready for fatherhood  Tansy_Gold   Jun-28-10 01:34 PM   #73 
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  - The Week Ahead by Bill in Portland Maine.  ozymandius   Jun-28-10 08:01 AM   #43 
  - Libertarians Make Bad Lifeguards  Demeter   Jun-28-10 08:07 AM   #47 
  - "Transparency"  Demeter   Jun-28-10 08:13 AM   #48 
  - Were making money on your 401(k) even if youre not.  bread_and_roses   Jun-28-10 09:06 AM   #55 
  - yep, all for them  DemReadingDU   Jun-28-10 09:47 AM   #58 
  - numbers and blather  ozymandius   Jun-28-10 09:56 AM   #60 
     - 11:50am -'s all good.  Roland99   Jun-28-10 10:55 AM   #65 
        - Break Out the DramamineDown to Only 10 pt gain at 1 pm  Demeter   Jun-28-10 11:50 AM   #66 
           - micro-range trading  Roland99   Jun-28-10 01:22 PM   #72 

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