Freddie and Fannie Mae problems


	Freddie and Fannie Mae problems

turpak

8-31-2009 6:48 PM

42 views

turpak says:

Their government's backup status is busting returns to investors.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/17f0579b-f336-43d9-8ab9-bf4e95c41674/F1CA05EF-F643-4BCD-BB0C-E9609102E92F/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.nytimes.com/2009/08/31/business/31views.ready.html?partner=rss&emc=rss#" href="http://www.nytimes.com/2009/08/31/business/31views.ready.html?partner=rss&emc=rss#" style="font-size: 11px;">www.nytimes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/08/31/business/31views.ready.html?partner=rss&emc=rss#"><P> Lawmakers seem content to allow the two companies, whose combined value of holdings and guaranteed securities is  $5.4 trillion, to slowly expand. That’s a shame because forcing them to wind down their portfolios of mortgage-backed securities would be a good first step toward eventually deflating them. </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/08/31/business/31views.ready.html?partner=rss&emc=rss#"><P>The problem arises from the companies’ dual roles. They have a public policy mandate to increase lending to the housing market. And they are supposed to reward shareholders. The conflict between these two goals caused the companies to nearly collapse. </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nytimes.com/2009/08/31/business/31views.ready.html?partner=rss&emc=rss#"><P>When housing markets crashed, the direct mortgage portfolios left Fannie and Freddie saddled with avoidable losses. These are now taxpayer’s problem. A quick way to avoid exacerbating this privatization of gains and socialization of losses would be to ban the two firms from buying more mortgage-backed securities  and force them to run off their portfolios. Then the government can turn to the more nettlesome issue of their guarantees. </P></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/F1CA05EF-F643-4BCD-BB0C-E9609102E92F/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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