Monday, July 18, 2011

Will Free-Marketeers Save Fannie and Freddie?

By Phillip L. Swagel

Here is one clear lesson from the economic meltdown of 2008: Any future U.S. administration will intervene directly and heavily if faced with a potentially devastating economic crisis. Market purists might not like it, but it is a fact I witnessed firsthand at the Treasury Department during the George W. Bush administration.

As a corollary, it is also true that the government will be compelled to step in if it becomes concerned that American families cannot obtain mortgages at reasonable interest rates. Indeed, it is inevitable that the government will also intervene if secondary mortgage markets -- that is, the trade in securities and bonds made up of bundled mortgages -- lock up.


  1. in the future most mortgages will be held by the gov....(some book from the late 80's)
    fred and fran are held by the fed and they hold some 70% of all mortgages?
    taxpayer guaranteed

  2. The Free Marketers aren't going to save anything. And why should they? Who wants to take on a fledgling government owned enterprise privately just to help it float a bit longer? The free market system is dead. The capitalist-government-socialist system is dead. All that's left is to pick up the pieces and start anew with something better, something more intelligent where neither the rich nor the government controls all. Seems simple except for all the brainwashed victims and the participants who ultimately will only accept one or the other.

  3. The ratings agency Moody's has a suggestion for resolving the debt debate/crisis: Do away with the debt ceiling!!!

    Just in case you didn't think the banksters are running the show from all corners.

  4. the "free marketeers" financial sector
    already stuffed up their mortgage system they created loan money for mortgages out of fresh air in the fractional reserve banking system but still went belly up even though their profits and mortgage loans were subsidised by government through freddie and fannie.

    Outright fraud ,Ponzis and criminality in selling"creative" structured financial instruments like dud sub prime bonds and by destroying the legal registration of property titles in order to dodge taxes hastened their Ponzi collapse .
    Their losses and the losses of F&F were nationalised and bank reserve capital replaced by TARP etc handouts.

    Now these banksters get cost free interest free money from the fed that they hoard as cash getting interest from the Fed to boot and are yet unwilling to lend that money into the property market and collapsing property bubble they created and destroyed .
    Now these criminals say that they and the return of the old subsidised "free market" are not the cause but the solution?

  5. We haven't had a free market in the USA since 1913, or probably much earlier.

  6. Even though housing prices are less today, I would have bought a house by now if the government would have let the prices go back to were they should be. But as I can see, there is no use buying a house in the US today. The government seems to not like to let the free market work. If it did, US home prices would be realistic again. But I digress, the US is on a downhill slide that no one can stop, even though the baby-boomers will try- oh well.

  7. So basically what they are saying, dont worry if you cant afford this or that, just default if you cant make payments, this way we can keep the bailouts coming

  8. Dontsayididnt tell youJuly 19, 2011 at 11:17 AM

    We all know how this is going to play out;
    First The debt ceiling will most definitely be raised by August.
    Soon after by fall The banks will start loaning again.
    They will offer Low interest credit rates for credit cards, business start ups, homes, cars you name it.
    Americans will gobble up this new cheap credit debt.
    The main stream media will beat the drums accordingly night and day over and over all over the news how the economy is booming again.
    Peppers will be looked upon as nay Sayers, social outcasts, druggies, bad investors, anti Americans, the name calling will go on and on till they beat the preppers back into the shadows.
    This will go on till president Obama gets reelected.
    Then the real pain will begin..
    Tax hikes, crushing debt reforms, salary cuts, benefit cuts, pension reforms, social security cuts, medicare cutbacks medicaid cutbacks.
    all the time they will be increasing the taxes on the middle class.

  9. Tax hikes are already in the near term picture. The republicans are already calling for a 1 trillion tax increase on people. These are the ones supposedly "against new taxes". Well we know how that goes, as long as its not against rich corporations and CEOs.


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