Ben, being a relatively smart dude, knows that the next great financial crisis for the US will be the implosion of Fannie Mae, and wants to get ahead of the shock wave.
Too late. The reckless lending sponsored by this quasi-governmental entity will shock future generations, and the congressional hearings in 2009.
The HUD home, Resolution Trust Corporation, Neil Bush, S&L Scandal, Charles Keating affair from the 1980's reinvented itself, as a little company called Fannie Mae.
Bernanke: Treasury should weigh GSE debt limit tool
Federal Reserve Chairman Ben Bernanke on Thursday said the U.S. Treasury Department should consider limiting the debt Fannie Mae and Freddie Mac can sell if Congress fails to act.
Weighing in on the most contentious issue in the current debate over the companies' business and regulation, Bernanke said the Treasury Department has power to limit their debt issuance and perhaps power over terms and maturities of that debt.
"If we are unable to achieve progress through Congress, I don't think Treasury should abandon that power," Bernanke told the congressional Joint Economic Committee.
"I think it should consider using it if it believes that the systemic risks being generated by the portfolios greatly outweigh the benefits that are mandated by the affordable housing mandate," he said.
May 01, 2006
Fannie Mae's long, long way down
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Funny Fed Video.
http://tinyurl.com/grvu2
Tom
WHAT AFFORADABLE HOUSING IS THE last SENTENCE IN THIS ARTICLE REFERRING TO???
Did you notice that the big mortgage companys pay the highest interest on CD's? What happens when they go bankrupt? Do their CEO's get $400 million bonuses? I refuse to patronize these companies in any way.
"WHAT AFFORADABLE HOUSING IS THE last SENTENCE IN THIS ARTICLE REFERRING TO???"
What he means is that vitually anyone that can fog a mirror has been able to purchase a home regarless of their personal circumstances due to the miracle of cheap asian credit.
They take our jobs, we get to borrow their savings to continue living beyond our means.
"Why isn't fannie mae a penny stock?"
If it was allowed to do so it would have brought the entire economy down. The company also provides tonnes of bond underwriting profits to Wall Street and is almost entirely owned by institutions who have a vested interest in keeping FNM supported.
Anybody see where the Dollar is headed this morning...........DOWnnnnnn!
Bernanke will inflate the US out of debt. Buy gold, silver and USO
I read an article a while back that said the increasing and steady growth of unaffordable housing that started back in the 70's and has culminated in the insanity of the present day is directly attributable to the formation of Fannie May in the 70's.
The reasoning went:
Once there became a way for more and more folks to get loans easily, the price of housing just went up and up. (sound familiar?)
If that is even partly true, then I say let this organization die a quick death. It has caused nothing but pain and paralysis for the American economy and millions of individuals.
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