Issues
Fannie Mae collapsing! Paulson, Bernanke in despair!
Martin here with an urgent update on Fannie Mae’s devastating swan dive.
Last week’s plunge in the Dow — driven by the collapse of Fannie’s and Freddie’s shares — is just the first act of an unfolding tragedy.
Next, expect massive losses — and loss of confidence — at the world’s largest financial institutions that have stuffed their portfolios with Fannie and Freddie stocks and bonds.
Is all this turmoil just malicious rumors, as Washington and Wall Street officialdom would have you believe?
I’m afraid not: Even before the latest crisis began, these two giant mortgage lenders were terribly overleveraged and effectively insolvent, according to their own murky balance sheets.
The reality: Fannie Mae’s and Freddie Mac’s liabilities and contingent liabilities are far, far too large for their meager capital. And this house of cards is built on the quicksand of millions of mortgages that cannot be repaid.
Treasury Secretary Paulson predicts 2.5 million home foreclosures in 2008; and Fed Chairman Bernanke has testified that the crisis will continue deep into 2009. So, in combination, these two high officials are warning of potentially millions more foreclosures in 2009.
That leaves Washington with just two choices:
- Let them fail … allow the U.S. housing market to freeze up … and invite a deep depression. Or …
- Bail them out with taxpayer money … double the public debt overnight … bust the government’s finances … and gut the value of U.S. Treasury securities.
The big dilemma:
If Fannie Mae and Freddie Mac fail, international investors — loaded with Fannie and Freddie securities — will dump them in an avalanche.
But if the U.S. Treasury tries to absorb the impact of this disaster, those same investors will dump their Treasury securities in an equally large avalanche.
In EITHER scenario, foreign investors must sell their U.S. dollars.And either way, the dollar will crash, as crisis currencies — like the Swiss franc — will go through the roof.
All this is why I feel very strongly it’s now so important that you take action — both for urgently needed self-defense and to pursue immediate profit opportunities!
You’ve seen our Special Midyear Update warning you of these precise events. Now, click here to move forward to the next steps we recommend.
Needless to say, time is of the essence.
Good luck and God bless!
Martin
About Money and Markets
For more information and archived issues, visit http://www.moneyandmarkets.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Tony Sagami, Nilus Mattive, Sean Brodrick, Larry Edelson, Michael Larson and Jack Crooks. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amber Dakar, Dinesh Kalera, Christina Kern, Mathias Korzan, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau and Leslie Underwood.
Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.
From time to time, Money and Markets may have information from select third-party advertisers known as “external sponsorships.” We cannot guarantee the accuracy of these ads. In addition, these ads do not necessarily express the viewpoints of Money and Markets or its editors. For more information, see our terms and conditions.
book. Just follow these simple steps.
|
© 2008 by Weiss Research, Inc. All rights reserved. |
15430 Endeavour Drive, Jupiter, FL 33478 |
Related posts:
