the fannie/freddie crowding effect

Hormiguero_IHB

Hormiguero_IHB

New member
I worry that recent actions with the TARP will create a psuedo-GSE fraternity of banks, resulting in a climate where others can't directly compete on any level. FNM and FRE, of course, destroyed the rest of the lending business by both underpricing competition and creating a climate where ridiculous risks needed to be taken to compete. I worry that today's new zombie banks - GS, BAC, JPM, WFC, C - will conspire with the fed to destroy every other player in the global financial business, not through malice or planning, but through the same means by which fannie and freddie wrecked the housing market from the inside out. I really don't care whether or not sumitomo, RBS, DB, etc exist tomorrow, but I can't imagine that it will help the general stability and prosperity of the world if they don't.
 
From what I have been reading, AIG has been underpricing other players in the insurance market. The bailout of a company deemed too big to fail is causing havoc among responsible players in the insurance industry.



This is just another reason why the best thing for government to do is simply let the cards fall where they will.
 
No use worrying about it. It is happening. The incompetant and connected are being rewarded and subsidized to destroy the efficient and competant.



Geez, yield on the ten year is 2.98%. Huh?
 
Yes, low rates complete the dark picture.



IR's book looks like an excellent account of the last five years in domestic economic history.



<a href="http://www.amazon.com/Dogs-Demons-Tales-Dark-Japan/dp/0809039435">Here's the next ten starting now.</a>
 
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