Fannie Mae, Freddie Mac Bailout Would Cost Taxpayers Dearly

New York Times:

IT'S dispiriting indeed to watch the United States financial system, supposedly the envy of the world, being taken to its knees. But that's the show we're watching, brought to you by somnambulant regulators, greedy bank executives and incompetent corporate directors.

This wasn't the way the "ownership society" was supposed to work. Investors weren't supposed to watch their financial stocks plummet more than 70 percent in less than a year. And taxpayers weren't supposed to be left holding defaulted mortgages and abandoned homes while executives who presided over balance sheet implosions walked away with millions.

Read the whole story: New York Times

Comments

[outnow]

04:13 PM on 07/14/2008

One word: "HYPERINFL­ATION."

[thegreatgiginthesky]

07:16 AM on 07/14/2008

Why should I pay for Fannie Mae and Freddie Mac's mistakes?

[akryan]

07:48 AM on 07/14/2008

Even though fannie and freddie are publically owned there was only implicit beleif that they would be backed up by the feds because they were set up to be the backbone of the mortgage market, which they are. Right now they own or underwrite 50% of the mortgages in the country. Their historic AAA credit rating is the reason that home buyers can purchase homes at relatively low rates for the amount that people earn. The problem is that they've been put in the positon of backing up so many bad mortgages due to the deregulate­d lending practices of the last few years. Large funds around the world are invested heavily in freddie and fannie including most pension funds. If they go bust it will literally cost the world trillions. It sucks but they really are too big to fail.

[nastyvirus]

08:41 AM on 07/14/2008

Trillions? Good. Let's charge it to Bush's account.

[vippy]

12:58 PM on 07/14/2008

First get the bonuses back from their CEO's.

[dadw5boys]

10:01 PM on 07/13/2008

$ 5 TRILLION PLUS $ 3 TRILLION FOR THE WAR AND $ 4 TRILLION FOR THE USA AND THE USA IS NEARLY BANKRUPT.

GREAT JOB THERE BROWNIE!!!­!!!!!!!

[WIpatriot]

02:08 PM on 07/14/2008

Nearly?

[HuffyChick]

07:55 PM on 07/13/2008

Nice of them to announce this on a Sunday!

[HuffyChick]

07:53 PM on 07/13/2008

Nice of them to anounce this on a Sunday!

[nastyvirus]

08:44 AM on 07/14/2008

Nice of you to announce it twice!

[phlounder]

07:48 PM on 07/13/2008

With this diaster Bushco has redefined the meaning of "sucks'.

[OgreDaddy]

07:26 PM on 07/13/2008

The pain for this should begin at the top.

The people responsibl­e for this nightmare deserve to have ALL their assets seized and liquidated
into the " Paybacks are Hell " fund.

The CEOs CFOs and upper level managers should end up as homeless and destitute as the victims of their irresponsi­bility.

Their credit rating should be destroyed, the same way they have destroyed others and
some jail time would also be appropriat­e.

If you and I have to pay $30.00 for a $2.00 overdraft on our account then what goes around comes around people.

After we auction off their Villas and their Bentleys and their Private Jets, their Antiques, their Jewelry and their Furs the debt that remains might trickle down to the Congressme­n that allowed it all to happen.

If the Republican­s want to defer the rest to tax payers, just be sure that the taxes to pay for it all
come out of registered Republican taxpayer's pockets.

[AKJM]

07:55 PM on 07/13/2008

And further, not one dime to executive salaries.

[pbfishtaco]

07:09 PM on 07/13/2008

Neocon mantra: Socialize risk, Privatize profit.

Ommmmm. Ommmmm.

[Torus34]

06:45 PM on 07/13/2008

Did the Feds say that Sen. Schumer was responsibl­e for the troubles at Fannie Mae and Freddy Mac, too?

[researcher]

04:54 PM on 07/13/2008

my friends daughter made tons of money doing 100% mortages. now she is back to waitness.

most americans wanted reagans trickle down economics and deregulati­on well here it is. enjoy.

and the repubs want more deregulati­on. paradigm paralysis at its best

we are witness to the self destructio­n of capitalism

the world will be safer for it

everyone wants to blame politicans­; it is the system it is the system ok one more time it is the system, human's want to blame other humans very seldom look at the system.

we borrow from communists­, socialists­, and kings and still brag about our capitalism as best in the world.

paradigm paralysis not only with politician­s but with the masses of americans

the end result of this economic decline in america: bye bye middle class nice knowing ya

reagan gotcha good very good pure genius to make the rich richer and eliminate the middle class

you see reagan thought the middle class were whiners like dr phil two

really for socialism yet? didnt think so. oh the power of paradigms

[paixa3]

04:39 PM on 07/13/2008

We already know that. PLEASE tell the idiot shills in congress and the Federal Reserve Bank.

[darthdarcy]

04:33 PM on 07/13/2008

We could have solved this Crisis without spending one dime of Tax Payer Money...!

Just Peg the Sub Primes at 3% above the Fed Rate or Prime Rate not to go below 6.25-6.5% and forgvie all penalties to date 1/2 of which or more are illegal and then the banks wouldn't lose money and the people could stay in their homes...

Instead it's welfare for the crooked bankers and lending institutio­ns and the people millions will be made homeless and then put serious negative pressure on the already inflated and limited rental market causing others to lose their apartments those who couldn't even dream of home ownership.­..

It was that simple, but our government is corrupted and exists only to serve the very institutio­ns destroying it...

[paixa3]

04:40 PM on 07/13/2008

Spot on, Bravo to you.

[darthdarcy]

04:49 PM on 07/13/2008

Thanks I wish people could have heard this plan and gotten it to their representa­tives...

As the Solution..­.

[JRandomPoster]

03:54 PM on 07/13/2008

The ownership society is working out just fine as planned.

There are a few owners, and the rest of us are pwned.

[Egalitare]

08:27 AM on 07/14/2008

Yeah, those "Average Joes and Janes" who thought promotion of the "ownership society" was a great expression of the Free Enterprise system forgot to read the fine print about "the highest bidder....­"

[joebaggadonuts]

01:20 PM on 07/14/2008

You mean Bush was trying to hide these details from the people? Rush, Coulter, Malkin, Snow (god rest his soul), Perino, Kevin James, O'Reiley, Ingram, Savage, Hewitt, and on an on. These folks are the instructor­s telling us what to notice and what to think. Why didn't they say something before we were led down this path? /rhetorica­l questions.

[swift goat pet for truth]

03:46 PM on 07/13/2008

Socialize costs. Privatize profits.

[jeffp26]

03:33 PM on 07/13/2008

This all started when Greenspan bailed out Citibank, Bank of Boston, Shawmut, etc. in the early 80s.

The difference now is that with the Bush deficits reaching the moon and back, we cannot print more money without making inflation -- which is running at 30%+ now -- even worse.

Remember feeling sorry for all of the people in latin america years ago, when their inflation rate was so high? Well, we are them now. We are screwed. Third world country, here we come.