U.S. Unveils Plan to Aid Mortgage Giants
Federal Officials Offer Sweeping Proposal to Help Shore Up Fannie, Freddie
By Neil Irwin and Jeffrey H. Birnbaum
Washington Post Staff Writers
Monday, July 14, 2008; A01
The federal government unveiled a broad program yesterday evening to bolster troubled mortgage giants Fannie Mae and Freddie Mac, extending unprecedented support to the companies and proposing new authority to lend them money and even buy their stock.
Scrambling to announce the initiative before the trading week began, federal officials said they would allow the firms for the first time to borrow money from the Federal Reserve. Officials are also seeking permission from Congress to temporarily increase the amount the companies can borrow from the Treasury and enable the government to invest directly in the firms if conditions worsen.
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No matter how you slice this rotten apple, the Fed is essentially opening the U.S.Treasury to two governmental agencies no investor will touch with a ten-foot pole. There is no market for Fannie Mae or Freddy Mac, each of whose stock valuation has dropped by 90%. Aunt Mae and Uncle Mac are the door through which the nation's mortgages flow and are guaranteed. Bernanke and Paulson are prying open that securely closed door by 'buying' what no one else will buy.
With your money and my money.
But it's all for a good cause, so not to worry. If they failed to step in, the whole truth and nothing but the truth would be apparent in the massive fraud that made their buddies rich while millions stand to lose their homes.
Republicans to the rescue of the haves, galloping over the have-nots in what has been falsely claimed as 'their own best interests.' This lie has been so artfully presented to and gratefully accepted by the press that the Democrats in Congress will go along (again?)--for fear of being called obstructionist.
The Congress that sold American wealth, reputation, military and core values down the river for fear of not being sufficiently 'anti-terrorist' is about to cave to 'saving the investors' with your and my money. Why? Because to do otherwise would be 'anti-homeowner.' Or so they would have you believe.
We no longer have a government run by positives, but one manipulated by the threat of negatives. And until we get over it that trend will dominate, no matter who gets in the White House this November.
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