I am sure at least a few of my regular readers might be wondering WHY I have not yet done a posting about the report just out on the future of Fannie Mae and Freddie Mac. ( and the mortgage market ) The reason is that I knew my dear friend Bethany McClean, author of THE BOOK on the subject called "All the Devils are Here " would most certainly be called upon for comment. She was, and her brilliant response appears on SLATE .com ( click here) A number of options were presented and none of them are too practical. The combined entities who dominate the multi-trillion dollar market have so far cost the taxpayers $130 billion dollars. Two monsters were created and we will continue to leave with their remains for some time. I have done numerous posts on these two entities and if you would like to read any of them please go to my web-site and search Fannie.
1 comment:
Can't wait to talk with you more about this in person next week. I think Bethany's article is good - but very superficial compared to most of her work. Agree with her that bottom line is that it is unlikely FNM/FRE will truly ever go away in function. And should it? The last 10 years of their existence has been a massive failure by them, the gov't/congress vis-a-vis regulation, the rating agencies (why aren't they taking more of the brunt of this), overvalued real estate market, wall street greed...the perfect storm. But at the same time, once again they are the only ones providing liquidity and a robust secondary market (albeit "they" is the govt this time)...are we willing to live with much higher mortgage rates and much lower homeownership rates in the US? :)
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