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whereIstand admin
776 Opinions
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Set as news: False
Set as news: True
whereIstand editor
401 Opinions
31 Followers
This seems fine. I actually don't have a problem with just asking the nationalization question cause anyone who suggests "de facto support" or "no support" clearly would fall under the "no" side, right?
Okay, sounds good.
229 Opinions
15 Followers
Cover article from BusinessWeek about the Freddie/Fannie situation:
If that's the case, it might make more sense to nationalize Fannie and Freddie, or have the government take over their function of keeping mortgage money flowing during financial crises. Says Joshua Rosner, an analyst at Graham Fisher & Co., about Fannie and Freddie: "My personal view is you don't really need them." Fannie Mae and Freddie Mac showered huge paychecks and bonuses on their top executives when times were good. Now that money is tight, Administration officials are quietly discussing how to stage a possible bailout if matters get worse. It's a classic example of privatized gains and socialized losses. That's why this might be the right time to let the two wither away.
If that's the case, it might make more sense to nationalize Fannie and Freddie, or have the government take over their function of keeping mortgage money flowing during financial crises. Says Joshua Rosner, an analyst at Graham Fisher & Co., about Fannie and Freddie: "My personal view is you don't really need them."
Fannie Mae and Freddie Mac showered huge paychecks and bonuses on their top executives when times were good. Now that money is tight, Administration officials are quietly discussing how to stage a possible bailout if matters get worse. It's a classic example of privatized gains and socialized losses. That's why this might be the right time to let the two wither away.
terrific issue that will be an interesting debate...i actually think the current wording is fine, but maybe we could make the debate a little more nuanced:
What role should the government play in Fannie Mae and Freddie Mac? 1) full nationalization 2) de facto backing and support 3) no role
What role should the government play in Fannie Mae and Freddie Mac?
1) full nationalization
2) de facto backing and support
3) no role
whereIstand member
2 Opinions
3 Followers
From LA Times:
William Poole has long warned that mortgage titans Fannie Mae and Freddie Mac had grown so large that they posed a serious threat to the U.S. financial system. So let’s admit the obvious, Poole suggests: Fannie and Freddie should be nationalized In Washington, Treasury Secretary Henry M. Paulson Jr. and others want Fannie and Freddie to get back on their feet on their own. But if the companies try to raise massive sums of new capital by issuing stock, they will severely dilute the ownership of their current shareholders (that’s a big reason the stocks have nosedived).
William Poole has long warned that mortgage titans Fannie Mae and Freddie Mac had grown so large that they posed a serious threat to the U.S. financial system.
So let’s admit the obvious, Poole suggests: Fannie and Freddie should be nationalized
In Washington, Treasury Secretary Henry M. Paulson Jr. and others want Fannie and Freddie to get back on their feet on their own. But if the companies try to raise massive sums of new capital by issuing stock, they will severely dilute the ownership of their current shareholders (that’s a big reason the stocks have nosedived).
From AP:
The financial health of the two companies is of critical concern to Washington policymakers because of the crucial role they play in the housing market. The pair hold or guarantee around $5 trillion worth of mortgages. That's roughly half of the $9.5 trillion debt of the United States. The fear is that a failure of one or both would wreak havoc on the nation's financial system and the broader economy as well. The worries about Fannie and Freddie come as the government is depending on them to provide much-needed mortgage financing at a time when credit has gotten much harder to obtain. Congress, meanwhile, is moving closer to completing action on a major housing rescue package that would include provisions to create a new regulator for Fannie and Freddie and tighten controls over them. The bills also would permanently raise the limit on the loans they may buy. Democratic presidential candidate Barack Obama, who supports the Senate housing package, "has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families and that includes an essential role for Fannie Mae and Freddie Mac," campaign spokesman Bill Burton said. The government has been working on contingency plans to look at how to handle potential problems if they were to arise, including troubles at the mortgage giants. "I think it would be devastating to the economy to let them go under," Sen. Charles Schumer, D-N.Y., told reporters Thursday. "We should try everything else first, but that's something that would have to be on the table ... and I think the markets should understand that. It is highly unlikely that Fannie and Freddie would go under because the federal lifeline has always been there."
The financial health of the two companies is of critical concern to Washington policymakers because of the crucial role they play in the housing market.
The pair hold or guarantee around $5 trillion worth of mortgages. That's roughly half of the $9.5 trillion debt of the United States. The fear is that a failure of one or both would wreak havoc on the nation's financial system and the broader economy as well.
The worries about Fannie and Freddie come as the government is depending on them to provide much-needed mortgage financing at a time when credit has gotten much harder to obtain.
Congress, meanwhile, is moving closer to completing action on a major housing rescue package that would include provisions to create a new regulator for Fannie and Freddie and tighten controls over them. The bills also would permanently raise the limit on the loans they may buy.
Democratic presidential candidate Barack Obama, who supports the Senate housing package, "has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families and that includes an essential role for Fannie Mae and Freddie Mac," campaign spokesman Bill Burton said.
The government has been working on contingency plans to look at how to handle potential problems if they were to arise, including troubles at the mortgage giants.
"I think it would be devastating to the economy to let them go under," Sen. Charles Schumer, D-N.Y., told reporters Thursday. "We should try everything else first, but that's something that would have to be on the table ... and I think the markets should understand that. It is highly unlikely that Fannie and Freddie would go under because the federal lifeline has always been there."
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