When Fannie and Freddie hit the fan

[Common Sense Party]

When Fannie and Freddie Hit the Fan
Fannie and Freddie are part of a complex, spontaneously evolving, and partially disguised system of government support for homeownership.
by Clive Crook

Sat. Jul 19, 2008




The Treasury Department's "vast plan" to save Fannie Mae and Freddie Mac, as Monday's headline in The New York Times put it, was apparently not vast enough. Wall Street's instant reaction to the announcement from Treasury Secretary Henry Paulson Jr. was to drive shares of the two big lenders--pseudo-private agencies that own or guarantee nearly half of the mortgages in the United States--to new lows. This latest twist moved the lenders to the fore in the country's still-unfolding financial and economic drama, and they show no sign yet of moving aside.

This new prominence must feel strange. Until recently, Fannie and Freddie had maintained low profiles, given their amazing scale and the centrality of their operations to the housing mess that is dragging the economy

down. Their combined housing-loan book--mortgages, and guarantees of mortgages and mortgage-backed securities--is worth a staggering $5 trillion (equivalent to more than one-third of the economy's entire annual output). Over the years, some experts voiced concern about their management, their ambiguous status, and the regulations under which they operated. Little was ever done. Finally, Fannie and Freddie have made the front pages.

The pair are part of a complex, spontaneously evolving, and partially disguised system of government support for homeownership--probably the most generous system of its kind in the world.

< much more at http://www.nationaljournal.com/njmagazine/wn_20080719_2202.php >

[Common Sense Party]

1. Very long, but clear, explanation of the mess we're in. n/t

[Blue_In_AK]

2. Did you watch William Greider on Bill Moyers tonight?

He's not at all happy about this "bail-out" idea.

http://www.pbs.org/moyers/journal/07182008/profile.html

[Common Sense Party]

3. Didn't see it. It needs to be fully discussed and vetted.

What is the worst thing that could happen if we DO bail 'em out?

What is the worst thing that could happen if we DON'T?

[dreyer]

4. monkey into the white house

The worst thing that could happen, happened when our American system/people reached the point where a worthless twisted/evil c grade brain damaged chimp could be illegally inserted into the white house (TWICE!?!?). From that point on there was no possible good outcome, the disaster was preordained (barring impeachment from, it appears, a spineless congress). And until the arrogance (i.e. repukes) is washed away for good, it will be hard to turn around our country to where it is good for the people and represented for what is good for people (and not consumed with, for a reason I have never been able to figure out, putting makeup on a worst ever unqualified brain damaged worthless snorting/spitting evil monkey (bush jr.)). I guess that is where the term "the emperor has no clothes" comes from, stupid low class spineless scared people will see whatever they are told to see. The fighters with a spine see the unclothed dumbass chimpanzee.

[PassingFair]

5. Welcome to DU.

Glad you found us!