Democracy for Vancouver

WHEEEEEEEEEEEEEEEEEEEEEEEEEEE!

From our international banker this morning:

The dollar is under siege. The New York Times reported that the Bush Administration was considering a take over of Fannie Mae and Freddie Mac, possibly putting both into a conservatorship, which could mean the share value would be near worthless. The euro and pound both moved up two cents while the dollar fell two yen. Equities also did not find the news comforting and the Dow was trading down around -180. In addition there was a rumor of some kind of military action by Israel against Iran which was denied. Oil prices rose over $10 overnight but this in on the Fannie Mae issue and the falling dollar.

In early trading, Fannie shares sank $6.10, or 46.2%, to $7.10, while Freddie plummeted $4.01, or 50.1%, to $3.99. Both have lost more than 90% of their value since August. The companies’ bonds posted gains.

White House spokesman Tony Fratto declined to comment on “any internal deliberations” about Fannie and Freddie, but said President George W. Bush’s economic advisers keep “close watch” on markets. He said the best thing for Fannie and Freddie would be for Congress to pass new oversight legislation. [HAHAHAHAHAHAHAHAHAHAHA!!!!! -s.]

Some analysts said the government could not allow Fannie and Freddie to fail. A failure could almost grind the mortgage market to a halt. The fate of Fannie and Freddie has ramifications far beyond the United States. U.S. agency debt and agency-issued mortgage bonds held by foreign central banks has grown 18% this year to a record $979 billion.

Oil is also under pressure from a Brazilian oil strike scheduled to begin next week, but we knew that yesterday.

The Reuters/University of Michigan Surveys of Consumers’ July preliminary consumer sentiment index rose to 56.6 from June’s final reading of 56.4, according to a report released on Friday. It is probably good the survey was not taken today. The survey indicated that 90% of consumers believe the US is in recession.

Are you better off now than you were eight years ago?

Argh.

Once a year I get to spend a couple of days outside the office doing some landscape maintenance. While it may sound low & grimy, I look forward to it like a kid at Christmas. Outside. In the Sun. With the Willamette River flowing by and listening to whatever I want (and pointedly not my bosses’ voices).

It’s supposed to get to 88° today, with a light breeze and not a cloud in the sky. So with things pretty quiet in here and such doldrums in the financial markets, I think it’s a good day to go play in the dirt.

See you Monday.