04 Jan '10 04:13>5 edits
http://www.bloomburg.com/apps/news?pid=20601087&sid=a2Z5GnTAPcuo
Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallisaon, a former general counsel at the Treasury. In fact, the Treasury department recognized last week that the losses will be more than $400 billion when it raised its limit on federal support for the 2 government-sponsored enterprises. The US seized the 2 mortgage finaciers in 2008 as the government struggled to prevent a meltdown of the financial system. Their debt grew at an average of $184 billion annually form 1998 to 2008, helping fuel a bubble that drove home prices up by 107% between 2000 and 2006. In fact, the Treasury said on Christmas Eve that it would provide, "An unlimited amount of assistance to the companies as needed for the next 3 years to alleviate the market concern that the government lifeline for Fannie and Freddie, the largest source of money for the US home loans, could lapse or be exhausted. Lax regulation of Fannie and Freddie led to the mortgage companies taking too many risky loans, says Peter Wallson. He goes on to say, "It turns out it was impossible to regulate them. They were too powerful." He also says that no one knows how much $$$ will be needed to keep the two companies solvent.
So any predictions as to how much money will dissappear into these credit bohemoths that helped triggor the credit crisis? In addition, who in government is to blame? After all, both of these companies were started by the government and later overseen by the government. Where is the outcry for accountability within government?
Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallisaon, a former general counsel at the Treasury. In fact, the Treasury department recognized last week that the losses will be more than $400 billion when it raised its limit on federal support for the 2 government-sponsored enterprises. The US seized the 2 mortgage finaciers in 2008 as the government struggled to prevent a meltdown of the financial system. Their debt grew at an average of $184 billion annually form 1998 to 2008, helping fuel a bubble that drove home prices up by 107% between 2000 and 2006. In fact, the Treasury said on Christmas Eve that it would provide, "An unlimited amount of assistance to the companies as needed for the next 3 years to alleviate the market concern that the government lifeline for Fannie and Freddie, the largest source of money for the US home loans, could lapse or be exhausted. Lax regulation of Fannie and Freddie led to the mortgage companies taking too many risky loans, says Peter Wallson. He goes on to say, "It turns out it was impossible to regulate them. They were too powerful." He also says that no one knows how much $$$ will be needed to keep the two companies solvent.
So any predictions as to how much money will dissappear into these credit bohemoths that helped triggor the credit crisis? In addition, who in government is to blame? After all, both of these companies were started by the government and later overseen by the government. Where is the outcry for accountability within government?