Paulson Speech On Freddie & Fannie And Additional Remarks
If you would like to read Paulson's speech from yesterday, it is at the Treasury web site here.
Interesting remarks by former Treasury secretary Snow this morning. When he was head of Treasury, he said invariably every finance minister he would meet with from around the world would ask about the health of Freddie and Fannie. Regardless, this confirms the U.S. government created and perpetuated the Freddie and Fannie mess by implicitly backing these institutions. Why was there no reform? How about hundreds of millions spent by these firms on lobbying government officials. That's over now but it might reinforce a reality that your best interests have never been the top priority and it's time for massive change in Washington.
A friend of mine sent me some information that this might be a cover for GSEs (Freddie and Fannie) to start buying large sums of toxic mortgage backed securities to repair the banking system at the tax payer expense. This is obviously something that many eyes will be watching. That said, I listened for any hidden meanings or doublespeak yesterday and didn't hear any. To the contrary, an excerpt from Paulson's statement is below.
"To promote stability in the secondary mortgage market and lower the cost of funding, the GSEs will modestly increase their MBS portfolios through the end of 2009. Then, to address systemic risk, in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off, eventually stabilizing at a lower, less risky size."
Senator Schumer this morning made another good point re this bailout. No one wants it. That said, if bond holders would lose faith in American sovereign debt, including God-forbid, Treasuries, that would cost the American taxpayers even more.
More appropriately put, this is probably the best of all bad choices.
Interesting remarks by former Treasury secretary Snow this morning. When he was head of Treasury, he said invariably every finance minister he would meet with from around the world would ask about the health of Freddie and Fannie. Regardless, this confirms the U.S. government created and perpetuated the Freddie and Fannie mess by implicitly backing these institutions. Why was there no reform? How about hundreds of millions spent by these firms on lobbying government officials. That's over now but it might reinforce a reality that your best interests have never been the top priority and it's time for massive change in Washington.
A friend of mine sent me some information that this might be a cover for GSEs (Freddie and Fannie) to start buying large sums of toxic mortgage backed securities to repair the banking system at the tax payer expense. This is obviously something that many eyes will be watching. That said, I listened for any hidden meanings or doublespeak yesterday and didn't hear any. To the contrary, an excerpt from Paulson's statement is below.
"To promote stability in the secondary mortgage market and lower the cost of funding, the GSEs will modestly increase their MBS portfolios through the end of 2009. Then, to address systemic risk, in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off, eventually stabilizing at a lower, less risky size."
Senator Schumer this morning made another good point re this bailout. No one wants it. That said, if bond holders would lose faith in American sovereign debt, including God-forbid, Treasuries, that would cost the American taxpayers even more.
More appropriately put, this is probably the best of all bad choices.
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