Remember when I said that I believed that Asian Central Banks had threatened Paulson regarding Freddie and Fannie?
Here 'ya go from Bloomberg this evening:
"Concerns about the financial health of the biggest U.S. mortgage finance company had driven Fannie Mae's borrowing costs to the highest since March the previous week and its shares had tumbled 45 percent on the New York Stock Exchange. Investors in Asia, the biggest foreign owners of Fannie Mae's $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks.
Paulson told Mudd he had a plan to restore confidence in Fannie and Freddie, the core of the Bush administration's efforts to revive the U.S. housing market. ``At that point, the proposal began to take form,'' Mudd, 49, said in an interview. ``We're trying to solve a crisis of confidence. Would this do it?''
The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie. Congress included the proposals in a broader housing bill that President George W. Bush signed into law last week.
Asian investors were among the most important groups to soothe because central banks, financial institutions and funds in the region own $800 billion of Fannie Mae and Freddie Mac's $5.2 trillion in debt, according to data compiled by the Treasury. U.S. officials were concerned that sales from the region would push lending rates higher, said the people, who declined to be named because the discussions were confidential. "
$800 billion dollars. The precise amount that Paulson asked for, and got, in debt ceiling addition so he could buy $800 billion, potentially, worth of Fannie and Freddie's debt.
And there, in the underlined portion of the quote, is your threat. Either backstop that which the black letter printing in the prospectus (and yes, it really is there) says has no backstop and can lose value or we will not only refuse to buy more but will sell what we have.
Don't you think the American People deserved to know BEFORE our government signed over $800 billion of taxpayer money to CHINA that FOREIGN INVESTORS AND CENTRAL BANKS - THAT IS, FOREIGN GOVERNMENTS - had effectively BLACKMAILED our government?
Are you prepared to sit on your ass while FOREIGN GOVERNMENTS dictate what our government does, to the tune of $800 billion United States Dollars we do not have, constituting a personal debt of about $2,200 per person in The United States?
That's right folks - every man, woman and child had extorted from them $2,200 (or nearly $10,000 per family of four!) plus interest (forever, since we will never pay this debt down) and you weren't even told that it happened.
Had this article not been published by Bloomberg you still wouldn't know because Paulson, Bush and Congress DID NOT TELL YOU.
Now granted, the $800 billion (presumably) hasn't yet been spent. But if and when it is, you won't be told about that either, because Congress has no oversight authority nor right to approve Paulson's actions in this regard, so long as he remains within the $800 billion limit!
They claimed this was about helping homeowners.
THEY LIED; this was and is about bailing out FOREIGN GOVERNMENTS who made bad bets at YOUR expense.
Angry yet?
Angry enough to DEMAND that this bill be rescinded, and take every (lawful) action available to you as a United States citizen until it is?
If not now, then when will you insist our government NOT respond to blackmail by foreign interests - especially when they do so without telling you first?
No? You don't think you need to act on this right now, today?
Then take your accumulated wealth and earnings capacity - all of it - and kiss it goodbye. Your government is no longer standing in protection of our own economic sovereignty.
By the way, having gotten away with it once, they will do so again. $10,000 per family is, in fact, quite cheap compared to what's coming.
Go read The Ticker below this one and contemplate what happens in the Capital Markets when they "wake up" to how this bill got done.
You heard it here first.
Economics
