August 28, 2008
Shortchanging Our Shroff
Asia Is About to Give U.S. a Kick in the Fannie
“China holds $376 billion of long-term U.S. agency debt and, according to James McCormack, head of Asian sovereign ratings at Fitch in Hong Kong, most of it is in Fannie and Freddie assets. Fannie and Freddie aren’t just too big to fail — they’re too geopolitical to fail … Asia has few alternatives [for investment]. The magnitude of the region’s trade surpluses leaves few options other than parking money in the most liquid securities and keeping currencies from rising into uncompetitive territory.”
In order to please our foreign creditors (who generously provide $2 billion a day), we need to make the implicit guarantee of agency debt explicit (windfall gains for them!), wipe out the equityholders, and put the American taxpayer on the hook… that should do the trick. We can’t afford to stick our moneylenders; they hold the mortgage, right?
August 31st, 2008 at 9:54 pm
Most owned by the Chicoms? All the better to let the stock go to $0.
September 1st, 2008 at 12:11 am
@Thomas: They own the debt not the equity … the equity is owned mainly by old white men.
September 1st, 2008 at 8:27 am
“…owned mainly by old white men.”
An even better reason to let it go to $0.
September 1st, 2008 at 1:54 pm
Anthony: Old white men own most of the equity of… everything. :)
September 1st, 2008 at 3:50 pm
How true, Chairman. I actually don’t have a problem with old white men, just the demonizing of non-Anglo-saxon nations or ethnicities.
September 1st, 2008 at 5:00 pm
Anthony: This Anglo-saxon is fully in favor of our demonization! :)