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 …
This Wednesday, government-sponsored entity Freddie Mac announced that it lost $2.8 billion in just the last quarter alone from foreclosures and other related expenses. Both Freddie, and its sister Fannie Mae, are at the core of the recent housing finance crisis. Freddie and Fannie help finance 40% of all U.S. …
Freddie Mac CEO Richard Syron told reporters yesterday that Freddie’s dual role as a government sponsored entity charged with creating profit for private investors and serving the public by boosting the housing market is “almost impossible.” We almost agree: Fannie and Freddie are leftovers from an era when giant government …
