Government Leap Into Fannie, Freddie 'Sinkhole' Buys Time for Financial System

With the removal of Freddie Mac & Fannie Mae leadership, hopefully the US government won't provide "golden parachutes" or lucrative severence packages to those individuals!

Again the taxpayer will get screwed!!

Why were Fanni and Freddie ever privatized in the first place? Now that the government has taken them over, just make them government entities and stop the pretense --- as well as getting rid of the overpaid execs with the golden parachutes.

Sinkhole? Guess what, there is $210,000,000,000,000+ in debt leveraged against those holdings!!!! That will come from "somewhere" people, WAKE UP! We just nationalized virtually ALL our debt, which means that uncle sam owns your vehicle, house, business, etc. We just turned into a nationalist country!!! Why not wait until Sept 11th? This is far worse than a couple planes folks!!!!

I might know why it happened this weekend. Treasury hired MS to check the books and they reported to Treasury that the claimed capitalization was inflated. If that information leaked without the government responding the debt buyers would have totally shunned any more debt sales killing the mortgage market. Yes, all this was rumored before but MS confirmed it.

Welcome to the USSA. Pretty much all pretense of a free market republic has been abandoned. This is just the latest example of our government eschewing the commands of the founders to reinforce a thinly veiled oligarchy. The new synonym for proletariat, U.S. taxpayer.

Good Luck. The Government as run by Congress (at all time do nothing...lows), Historic deficit, etc. To have the government running FRE & FNM is sure to cause more problems as they seem to screw up most of what they do to line their own and special interests. VOTE ALL THE BUMS OUT AND START OVER. CANNOT DO WORSE! NO INCUMBANTS!

ezmoneygonnamakeusrich - couldnt agree with you more. i think this entire country is f'ed in the long run, and is designed to make the rich richer and poor poorer. this is a total debacle to protect the the rich's stake in our housing debt. a month ago paulson tells everyone the shareholder wont get screwed and he wants to keep the gse's shareholder corps and then changes his tune without any warning. my god, ive learned to take the OPPOSITE of what officials tell us as the truth.

Someday there will be another revolution, maybe we can save this republic. Everyone talks but nothing changes, the banks and wall street have the politicians in their pockets......nothing is going to change until the American people wake up and take control of THEIR country!

The government just confirmed that a lot of financial paper is worthless,.....and the stock market rallies on that news??? Hey, guess what? Our government is broke as well! This short term band-aid won't stem the inevitable.

If you think this is bad, wait until we have Obama and a democratic congress! Socialized airlines, automobiles, healthcare, and energy.

There are only $18 Trillion in the US. The Federal Government now owns $6 trillion in debt, plus the widening deficit. This is really a lose - lose situation. The Feds could win here, though, but it's not very likely considering Bush has problems with math. Isn't this act Communist?

The seizure of F/F was mandatory action…however, the root cause of the mortgage crisis was the improper and flawed expansion of the mortgage credit model by Fannie Mae/Freddie Mac, beginning the mid-to-late 1990’s. F/F set the tone for the entire market, and NO ONE questioned it. The housing market was radically distorted by the GSE’s and the major corporate lenders, eagerly financed by Wall Street, and poorly managed by regulatory and Congressional oversight. So, it makes sense to give those who did not exercise their statutory responsibilities over the housing market the complete and final control of housing. No one at the top of the financial food chain, public or private, should feel good right now. That said, anyone who thinks housing is disconnected from the economy is an idiot. The economy works when when housing works. So, if you want schools to function...if you want cops on the street...if you want to keep your jobs, deal with it.

The seizure of F/F was mandatory action…however, the root cause of the mortgage crisis was the improper and flawed expansion of the mortgage credit model by Fannie Mae/Freddie Mac, beginning the mid-to-late 1990’s. F/F set the tone for the entire market, and NO ONE questioned it. The housing market was radically distorted by the GSE’s and the major corporate lenders, eagerly financed by Wall Street, and poorly managed by regulatory and Congressional oversight. So, it makes sense to give those who did not exercise their statutory responsibilities over the housing market the complete and final control of housing. No one at the top of the financial food chain, public or private, should feel good right now. That said, anyone who thinks housing is disconnected from the economy is an idiot. The economy works when when housing works. So, if you want schools to function...if you want cops on the street...if you want to keep your jobs, deal with it.

Why rescue Bear Sterns, Fannie Mae, Freddie Mac, or anyone else affiliated with this mess? The real estate brokers, buyers knowing there there wasn't a chance in Haiti that they could afford a home, the banks loaning to these people, the Federal Government stepping in to save the good ole US of A when they themselves are 90+% of the problem, it makes no sense to this simple-minded country boy. What DOES make sense, to me, is spend $100,000,000,000 dollars investigating and prosecuting these CEO's, incompetant bankers, and slick-talking brokers rather than raping the American taxpayer of $500,000,000,000. so they can do it again. Ladies and Gentlemen who currently have a home mortgage or have a second mortgage on your home, the Government now owns your home, controls it's value, controls the mortgage market, and now controls you. Sure, the "American Dream" is to own a home and it's true that all are created equal. But after 232 years of existence as a Nation and facing the cold, hard facts of reality, we should know by now that all dreams cannot come true. Everyone, for whatever reason, is not willing to make the sacrifices that, oftentimes, are required to make their dream become a reality. Last but certainly not least is my belief is EVERY person in this World is responsible for their actions. It is also my belief that EVERY person in this World should be held accountable for those actions and accept the consequences ........ whatever they might be.. American by birth; Southern by the grace of God. harleyrider1013

The rich are bailed out by the poor and middle class (through deficit spending and the coming inflation - worthless paper money).

You Obama haters should check your history, the markets generally do much beeter with a Democratic admistration. Please note that it is now the smaller government Republicans that have created this mess and are now forced by their own foolishness to betray their basic small governement principles. Odd huh?

Awesome! We are bottoming and can now "bottom" fish real estate for the new 12-24 months! yahoo! RE PHD millionaire

HOW LONG DO WE HAVE? This is the most interesting thing I've read in a long time. The sad thing about it, you can see it coming. I have always heard about this democracy countdown. It is interesting to see it in print. God help us, not that we deserve it. How Long Do We Have? About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh , had this to say about the fall of the Athenian Republic some 2,000 years earlier: 'A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.' 'A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.' ' From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.' 'The average age of the world's greatest civilizations from the beginning of history, has been about 200 years' 'During those 200 years, those nations always progressed through the following sequence: 1. from bondage to spiritual faith; 2. from spiritual faith to great courage; 3. from courage to liberty; 4. from liberty to abundance; 5. from abundance to complacency; 6. from complacency to apathy; 7. from apathy to dependence; 8. from dependence back into bondage' Professor Joseph Olson of Hemline University School of Law, St. Paul , Minnesota , points out some interesting facts concerning the 2000 Presidential election: Number of States won by: Democrats: 19 Republicans: 29 Square miles of land won by: Democrats: 580,000 Republicans: 2,427,000 Population of counties won by: Democrats: 127 million Republicans: 143 million Murder rate per 100,000 residents in counties won by: Democrats: 13.2 Republicans: 2.1 Professor Olson adds: 'In aggregate, the map of the territory Republican won was mostly the land owned by the taxpaying citizens of this great country. Democrat territory mostly encompassed those citizens living in government-owned tenements and living off various forms of government welfare...' Olson believes the United States is now somewhere between the 'complacency and apathy' phase of Professor Tyler's definition of democracy, with some forty percent of the nation's population already having reached the 'governmental dependency' phase. If Congress grants amnesty and citizenship to twenty million criminal invaders called illegal's and they vote, then we can say goodbye to the USA in fewer than five years. If you are in favor of this, then by all means, delete this message. If you are not, then pass this along to help everyone realize just how much is at stake, knowing that apathy is the greatest danger to our freedom. WE LIVE IN THE LAND OF THE FREE, ONLY BECAUSE OF THE BRAVE

If you're going to base your GDP (and financial markets) on mortgages you'd better make sure you keep good jobs with benefits in your economy. It's that simple. Yes, this bailout amounts to welfare for the jobless as much as cronyism. But it's on the current administration's head. ALL OF IT. Because, when corporations are given a platform to napsterize the planet (commonly referred to as "productivity" and "globalization") and policy doesn't require ROI to mix rising wages and high demand for domestic workers back into your GDP, and you give your workers a new form of employment, shopping for mortgages every six months so they can pay their bills off the spread, while you let the private CEO's walk away with your country's returns (spell this E.N.R.O.N,) well you've spelled out F.A.I.L.U.R.E and this is why Eight IS ENOUGH. Because its simple, if you don't create good jobs with benefits people can't pay their mortgages. And if you don't like that well... maybe you'll like living in a country with a midget sized GDP.