Campaigning in Colorado yesterday Barack Obama blamed the financial crisis on “a culture of deregulation.” No, we don’t know what this means either. Pressed for specifics, some on the left manage to identify the 1999 Gramm-Leach-Bliley law as the deregulation source for all our problems. But as we have detailed …
There is no doubt that past government intervention in the market, particularly by Fannie Mae and Freddie Mac, is largely to blame for the current financial turmoil. And while past government intervention cannot be used to justify further government interference, we also have to ask how much unnecessary pain the …
The $700 billion that Treasury Secretary Hank Paulson is requesting from Congress to restore liquidity in the financial markets is a breathtaking sum of money. But it is also important to remember Paulson has already committed $200 billion to recapitalize Fannie Mae and Freddie Mac. The size of their bailout …
Earlier this month, the United States doubled its outstanding debt obligations in a single day. What happened? Taxpayers were forced to honor the implicit guarantee the federal government made years ago to back up Freddie Mac and Fannie Mae’s financial obligations. Freddie and Fannie are at the heart of the …
Fannie Mae and Freddie Mac were created during the New Deal by the Roosevelt administration in order increase home ownership. With government backing and price controls, the supply of housing was artificially increased, with the funds coming from the taxpayer. Even when Fannie and Freddie were made into government sponsored …
This weekend Treasury Secretary Henry Paulson announced that mortgage giants Freddie Mac and Fannie Mae will be placed in a government conservatorship that closely resembles a bankruptcy reorganization. The move puts U.S. taxpayers on the hook for $5.4 trillion in outstanding mortgage debt and commits the government to provide as …
Yesterday all three major financial indexes fell after an article in Barron’s reported the Bush Administration is planning to exercise the authority to recapitalize Fannie Mae and Freddie Mac. A Treasury spokeswoman denied the report, but FusionIQ CEO and equity-research director Barry Ritholtz told the AP: “You don’t pass that …
