...Paulson was right to put the Federal government's weight behind Freddie and Fannie, "for better or worse."

I thought the "FREE MARKET" is what this ADMINISTRATION PROMOTES? (BUSH)


Freddie Mac Chief: Don't Blame Me
Posted Aug 05, 2008 12:20pm EDT by Aaron Task
Related: fre, fnm, mer, XLF, ^DJI, ^GSPC
Richard F. Syron, chief executive of troubled mortgage giant Freddie Mac, ignored red flags about the financing of questionable loans, according to an article in today's New York Times. The quotes from Syron are incredible, and not in a good way.

"If I had better foresight, maybe I could have improved things a little bit," he told the Times. "But frankly, if I had perfect foresight, I would never have taken this job in the first place."

The warnings about pending financial peril came from David Andrukonis, Freddie's former risk officer. "Everybody understood that at some level the company was putting taxpayers at risk," he told the Times. Of course history has shown as housing prices began declining in 2006, choices that Freddie Mac and Fannie Mae made have proved disastrous.

According to Lawrence White, professor of economics at the NYU Stern School of Business, both Freddie and Fannie Mae seem headed toward insolvency. White isn't a big fan of using taxpayer dollars to subsidize the GSE's shareholders, which is the effective result of Treasury Secretary Paulson's rescue plan for the firms. He believes Fannie and Freddie should be totally privatized.

But given the "fragile times" in the economy and credit markets, White says Paulson was right to put the Federal government's weight behind Freddie and Fannie, "for better or worse."