Risky Business
March 19th, 2008 by Peter SudermanOh boy.
The government on Wednesday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to inject an additional $200 billion of financing for home loans.
…It was the third step the government has taken in recent weeks to allow Washington-based Fannie and McLean, Va.-based Freddie to shoulder larger burdens in the mortgage market despite their multibillion-dollar fourth-quarter losses and expectations of further red ink this year.
That’s it! Expose taxpayers to even greater risk by placing an even greater share of the financial weight load on lenders with an implicit government backing. Meanwhile, half the people in the room don’t even understand what’s happening.
March 19th, 2008 at 12:22 pm
Why don’t you do a post about Bear Stearns? Look, once again we’re pretty much in agreement on how bad the Fed’s plan is. But, once again, you guys only scream bloody murder when the Government’s trying to help out everyday homeowners. When millionaires are being saved with a government bailout such as in the case of Bear Stearns, you guys are silent, despite that being no worse a waste of taxpayer money. Why?
March 19th, 2008 at 1:25 pm
The Bear Stearns case is a travesty, although the firm’s equity was pretty much wiped out, so I’m not sure how much of a bailout there was. The problem is that the Federal Reserve is now taking toxic mortgage-backed junk on to its books. Right now its a 28 day loan but at some point the taxpayer may be liable.
March 19th, 2008 at 2:29 pm
As we well know, the taxpayer will likely be liable pretty soon. This is how taxpayer-funded bailouts start…