The American Stragetist - logo
 

Fannie and Freddie Bailout Calms Some and Angers Others

Sam Sherraden - 
July 24, 2008 - 2:47pm

The Congressional Budget Office estimates the guarantee for Fannie Mae and Freddie Mac will cost the government $25bn. This incorporates a 50% chance the guarantee will not be used at all before it expires in 2009. Even as Fannie and Freddie draw federal support, the recent housing bill does not require that they cut their dividends to shareholders. Confidence in the government sponsored companies is essential to the mortgage market and financial stability, but it is not clear why share holders who reaped benefits from their growth should not face the financial consequences of their investment.

Snapshot asks, is it possible to maintain stability and confidence, repay Fannie and Freddie's creditors, and allow shareholders to face the consequences of their investments?

CBO - Letter to Committee on the Budget
Portfolio.com - Parsing Paulson: The Fannie and Freddie Bailout
BNP Paribas - What happens next?

Bookmark/Search this post with:
  • Delicious
  • Digg
  • StumbleUpon
  • Propeller
  • Reddit
  • Magnoliacom
  • Newsvine
  • Furl
  • Facebook
  • Google
  • Yahoo
  • Technorati
  • Icerocket
Tags:

Post new comment

Please note that comments are reviewed by an editor prior to publication. We welcome all relevant critiques, feedback and counterarguments, but comments that are profane, offensive, off-topic or blatantly commercial will not be published.
The content of this field is kept private and will not be shown publicly.
CAPTCHA
This question is for weeding out automated spam submissions.