Bill Ackman Thinks The Fannie Mae (FNM)-Freddie Mac (FRE) Bailout Will Have To Be Redone
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Pershing Square's Bill Ackman told the Value Investing Congress that he doesn't like the Fannie Man (NYSE: FNM), Freddie Mac (NYSE: FRE) bailout. He thinks the Fannie and Freddie bailout will have to be redone.
Ackman did say the AIG (NYSE: AIG) move was the most rational thing the government has done in this process. However, Bill Ackman did note that he thinks the government taking 80% is a little over-reaching. He said the strong do what they will, the weak do what they must. For example, when Borders Group (NYSE: BGP) was in need of raising money in two weeks, Pershing Square funded them (Pershing was a previous large investor in Borders), but he would never even consider taking 80% warrants.
Ackman did say if AIG is able to pay back the government sooner than expected, the government could perhaps reduce its stake to the benefit of AIG shareholders. You can learn more about what Ackman is referring to by checking out the StreetInsider Value Investing Congress Entity.
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The mortgage and consumer credit .......
The mortgage and consumer credit giants, Fannie Mae and Freddie Mac, were given enormous stimulus packages a couple months ago in order for them survive during the economic meltdown. In Washington DC on Tuesday, December 9th, the mortgage firms were subject to a hearing by the House Oversight Committee where they were grilled by Congress over their corporate strategies that led to the near destruction of their companies. What had apparently happened was that the leadership of those companies had invested in mortgage backing for their cash flow. So they basically bought other people’s debt, thinking that it meant instant cash flow, especially when they raised the interest rates on the mortgages that they purchased. Borrowers who had borrowed money from irresponsible lenders started defaulting on their loans, thus, the companies that had bought their debt began to stagger towards the brink. House Oversight Committee Chairman Henry Waxman called their action irresponsible, especially after senior risk managers had questioned the call to make and invest in such loans. This shocking incident emphasizes the importance of being extremely responsible with your finances. Budget properly, practice smart spending habits, save money, and don’t put money into anything that looks too good to be true. If you need some help with a sudden emergency expense, payday loans are available at a reasonable rate to keep your finances above water until your next payday. Click to read more on Fast Payday Loans.
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The mortgage and consumer credit .......
Franrose O on Dec 15, 2008 05:00 AMThe mortgage and consumer credit giants, Fannie Mae and Freddie Mac, were given enormous stimulus packages a couple months ago in order for them survive during the economic meltdown. In Washington DC on Tuesday, December 9th, the mortgage firms were subject to a hearing by the House Oversight Committee where they were grilled by Congress over their corporate strategies that led to the near destruction of their companies. What had apparently happened was that the leadership of those companies had invested in mortgage backing for their cash flow. So they basically bought other people’s debt, thinking that it meant instant cash flow, especially when they raised the interest rates on the mortgages that they purchased. Borrowers who had borrowed money from irresponsible lenders started defaulting on their loans, thus, the companies that had bought their debt began to stagger towards the brink. House Oversight Committee Chairman Henry Waxman called their action irresponsible, especially after senior risk managers had questioned the call to make and invest in such loans. This shocking incident emphasizes the importance of being extremely responsible with your finances. Budget properly, practice smart spending habits, save money, and don’t put money into anything that looks too good to be true. If you need some help with a sudden emergency expense, payday loans are available at a reasonable rate to keep your finances above water until your next payday. Click to read more on Fast Payday Loans.