Weekend Update: Want A Breath Mint?

Posted by Equity Private, Oct 04, 2008, 8:10pm

There are a lot of wonderfully tasty jabs in the New York Times' piece on Fannie, this one on the interaction between Countrywide and Fannie is my favorite:

"You're becoming irrelevant," Mr. Mozilo told Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.

"You need us more than we need you," Mr. Mozilo said, "and if you don't take these loans, you'll find you can lose much more."

Then Mr. Mozilo offered everyone a breath mint.


Pressured to Take More Risk, Fannie Hit a Tipping Point [New York Times via Alea]

2Recommend this! 11Comments

Tags: Countrywide, Fannie Mae, Mozilo

Comments

1

Posted by guest, Oct 04, 2008 9:25PM

I bet this mess would have been avoided if CPI used house prices rather than rents. The Fed would have been forced to raise rates when the bubble was forming.

2

Posted by Novice, Oct 04, 2008 9:56PM

What the Times was too embarassed to report was that the entire exchange took place inside a tanning salon.

3

Posted by guest, Oct 04, 2008 10:24PM

Who's irrelevant now, bitch?

4

Posted by Lowly Assistant, Oct 04, 2008 11:42PM

Novice,

Goddamn you. I was beaten by time and intellect on that. Can you imagine Mudd and Moz sweating their asses off, wearing those pink "sun goggles" or whatever they're called? Moz finishes his diatribe, before spraying more oil on his face and legs? "Breath mint, bitches?"

Another note: is it in poor taste that I fully admit my contentment regarding this NYT piece? I kinda feel dirty. Not kinky, just dirty...like running across kiddy porn on a priest's desk, and still placing a fiver in the basket as it passes through the pew. Things are strange.

5

Posted by guest, Oct 04, 2008 11:44PM

Not on topic...but anyone see that a NY judge granted injunctive relief to Citi extending the exclusivity period with Wachovia? The game is afoot...

6

Posted by guest, Oct 05, 2008 12:34AM

Agreed #1. Furthermore, by using Owner Equivelent Rent the CPI is vastly underestimating the deflation going on now.

Ain't karama a bitch. By tweaking models to cover up inflation all these years they completely missed the start of the crisis and they are now missing the the true magnitude of it's downside.

7

Posted by guest, Oct 05, 2008 12:43AM

Check this site for some hysterical hedge fund shit:

http://upzero.com

8

Posted by guest, Oct 05, 2008 5:44AM

So when do skilling and fastow get out of jail? I guess their only mistake was not selling their SPEs to Fannie Mae.

9

Posted by Dan Daoust, Oct 05, 2008 4:19PM

I'm still staggering from that article. All that yammering from Pelosi et al about insulating Main Street from Wall Street and blaming the Republicans' deregulation for the crisis, and meanwhile what we have here is proof that it was the Democrats who lead the charge for Fannie and Freddie to buy up the riskiest MBS's.

Incredible that the most potent retort to the Democrats' central political claim would come from the Times.

10

Posted by Finnegan, Oct 05, 2008 6:26PM

Let's not be singular in focus and dismiss deregulation either. After all, it was Republicans in the White House, and others as well, who were fully compliant in allowing Fannie to widen its scope.

And one would suspect that while Fannie was part of the process in creating demand for less than spectacular loans, in other areas related to derivative products (from Wall Street and insurers)and loan standards at the contract level, oversight was certainly lacking.

Suspect nobody is free of blame.

11

Posted by guest, Oct 05, 2008 9:37PM

that article was incredibly painful to read. Mudd is truly a pathetic guy...'I was forced into this by means I couldn't control'...yet I didn't resign & kept cashing the checks. way to change the system from within.

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