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| Subject: Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac (NYSE: FRE), is a government sponsored enterprise (GSE) of the United States federal government. Freddie Mac has its headquarters in the Tyson’s Corner CDP in unincorporated Fairfax County, Virginia. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as mortgage-backed securities to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name, “Freddie Mac”, was an acronym of the company’s full name that had been adopted officially for ease of identification. On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA. The action has been described as “one of the most sweeping government interventions in private financial markets in decades”. Moody’s gave Freddie Mac’s preferred stock an investment grade rating of A1 until August 22, 2008 when Warren Buffett said publicly that both Freddie Mac and Fannie Mae had tried to attract him and others. Moody’s changed the credit rating on that day to Baa3, the lowest investment grade credit rating. Freddie’s senior debt credit rating remains Aaa/AAA from each of the major ratings agencies Moody’s, S&P, and Fitch. As of the start of the conservatorship, the United States Department of the Treasury had contracted to acquire US$1 billion in Freddie Mac senior preferred stock, paying at a rate of 10 percent a year, and the total investment may subsequently rise to as much as US$ 100 billion. Home loan interest rates may go down as a result, and owners of Freddie Mac debt and the Asian central banks who had increased their holdings in these bonds may be protected. Shares of Freddie Mac stock, however, plummeted to about one U.S. dollar on September 8, 2008 . The yield on U.S Treasury securities rose in anticipation of increased U.S. federal debt. [Wikipedia: 2009] Social change: By John Schroy, on June 25th, 2010 |  One comment  Restricted availability of consumer credit and a greater propensity of households to save before spending, may result in less use of credit cards and smaller mortgages. A return, even partial, to saving habits of the 1950s could stimulate economic recovery. The popular Dave Ramsey radio and TV shows suggest that a societal change in this direction is at least possible. Lower levels of personal debt would boost the economy and make people happier. June 25th, 2010 | Print Article |  Email Article |  Topics: Baby Boomers, Barack Obama, Dave Ramsey, Democratic Party, Economic Recovery, Fannie Mae, fiscal deficit, Freddie Mac, Great Depression, Leverage, Mortgage-backed Securities, pension, pension plans, rating agencies, sub-prime mortgages, unemployment | Category: Small Investors, featured | One comment |  Short urlUS politics: By John Schroy, on September 25th, 2009 | Leave a comment  Closely connected with President Barack Obama, the ACORN group of “community organizers” has drawn censure from the Democrat-controlled Congress as a result of daring investigative reporting by James O’Keefe and Hannah Giles. However, effective Congressional action seems unlikely. The HUD grants program is a ‘honey pot’ that has kept legislators of both parties in slush funds for generations. Take the case of the sidewalk in Sandy, Utah … September 25th, 2009 | Print Article | Email Article | Topics: ACLU, ACORN, Barack Obama, Bertha Lewis, Fannie Mae, Federal Housing Administration, Freddie Mac, Ginnie Mae, Glenn Beck, Hannah Giles, HUD, James O'Keefe, SEIU, Shaun Donovan, sub-prime mortgages, Tides Foundation, United States, US Congress | Category: US Politics, featured | Leave a comment | Short urlThe threat of inflation By John Schroy, on March 31st, 2009 | 3 comments  The supremacy of the US dollar is not yet dead, but portents of a fatal cancer — inflation — are there for all to see. The extreme, profligate spending of the Obama administration, combined with populist, irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. Furthermore, a large part of the American electorate doesn’t understand or is unaware of what lies ahead. March 31st, 2009 | Print Article | Email Article | Topics: Barack Obama, Barney Frank, Bernard Madoff, Bill Clinton, China, Chris Dodd, Dennis Kucinich, Euronext, executive stock options, Fannie Mae, fiscal deficit, Freddie Mac, General Motors, IMF, industrialization, Inflation, Jimmy Carter, Lyndon Johnson, Monica Lewinsky, Nancy Pelosi, NASDAQ, NYSE, oil, OMX Group, reserve currency, Ronald Reagan, Stock Buybacks, sub-prime mortgages, Timothy Geithner, unemployment, US dollar, Warren Buffett | Category: Inflation, featured | 3 comments | Short urlFeatured articles on inside pages
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