Fannie & Freddie

[Winnie]

Freddie Mac's Next Hurdle: Raise Cash
Treasury Working to Make Sure Debt Sale Succeeds
By Jeffrey H. Birnbaum and Steve Mufson
Washington Post Staff Writers
Sunday, July 13, 2008; Page A01
Treasury Department officials were working the telephones yesterday to make sure that Freddie Mac, one of the nation's two troubled mortgage giants, will be able to sell $3 billion of its securities tomorrow in a previously scheduled sale that has now become a crucial test of investor confidence.
Though officials said they were optimistic the sale would be a success, anything less would pose new questions about how far the federal government is willing to go to prop up Freddie Mac, its sister Fannie Mae and other faltering financial enterprises.
Officials spoke yesterday with major banks that normally purchase securities, like the short-term debt offered by Freddie, to ensure these firms still plan to place bids tomorrow. This was part of an effort by officials at Treasury, the Federal Reserve and other agencies this weekend to gauge market sentiment and check that investors still have faith in Freddie Mac and Fannie Mae after the steep decline in their stock prices last week.
At the same time, Treasury officials were considering several options to backstop the sale in case they discover that interest in the securities is flagging, according to sources familiar with the discussions. Under one alternative, the Treasury or Fed would purchase the securities directly.
Other possibilities are allowing the Federal Reserve Bank of New York to buy the debt indirectly through private brokers or asking private firms to purchase the debt while extending to them either a public or private assurance that the government would back the securities if Freddie were ultimately unable to cover its obligations.

As the credit crisis has battered one financial giant after another, federal officials have taken steps that have put the government, and potentially taxpayers, on the line behind private institutions.
Last week's gut-wrenching ride for shareholders of Fannie Mae and Freddie Mac raised speculation about whether the Bush administration might be forced to step up again, either by taking direct control of the firms or by pumping fresh capital into them, perhaps in return for stock and a promise to restructure the companies.
It would be only the latest in a series of unusual interventions. In March, the Fed extended a $30 billion credit line to orchestrate JP Morgan Chase's purchase of troubled investment bank Bear Stearns. The Fed then let other investment banks borrow directly from the Fed at favorable rates. And Friday the Federal Deposit Insurance Corp. seized control of California-based IndyMac Bank with plans to liquidate its assets at a cost that could wipe out more than 10 percent of the FDIC's funds.
"Someday this capitalistic economy, or what we used to call the capitalistic system, needs to get back on track and that means failure," said Lee Hoskins, former president of the Federal Reserve Bank of Cleveland. "You can't have risk-taking without failure."
But if there is a limit to the government's willingness to back financial giants, now might not be the best time to find out.
Even long-time critics of Fannie Mae and Freddie Mac -- unusual hybrids with private shareholders, a public mission, a congressional charter and implied government backing -- say that the federal government has no option but to assure their viability because they are so central to already troubled mortgage and housing markets and hence to the overall economy.
The $5.2 trillion in mortgages owned or guaranteed by Fannie Mae and Freddie Mac dwarfs the size of the savings and loan institutions taken over by the federal government in the late 1980s or even the big Japanese banks that required government assistance there in the 1990s. These have been two of the biggest post-Depression financial rescue efforts.
Moreover, at a time when commercial banks have become cautious about new loans, Fannie Mae and Freddie Mac continue to provide liquidity for more than 70 percent of new home mortgages.
In addition, banks, pension funds and other institutions as well as foreign governments hold large amounts of the two firms' bonds. Any suggestion that the U.S. government wasn't standing behind the firms might cause widespread losses and further caution in credit markets.
"We have no options like we did with S&Ls. These two are so large and so vital to the continued operation of the mortgage markets that the government must back them," said Peter Wallison, a longtime critic of implicit government backing for the firms and general counsel of the Treasury under President Reagan. "We should be grateful that they still have sufficient capital to be considered by their regulator to be viable and that capital markets see Fannie and Freddie as backed by the government."
Many economists, citing the U.S. thrift and Japanese banking crises, are urging the Bush administration to seize this troubled moment to try to change the nature of Fannie Mae and Freddie Mac or gradually shrink their size to reduce the economy's exposure to them. These economists warn that U.S. government efforts to prop up S&Ls and Japanese efforts to prop up big banks years ago only extended and increased the size of those financial debacles.
From the mid-1980s to mid-1990s, the U.S. government seized more than 1,000 thrift institutions and sold off more than $500 billion in assets at a taxpayer loss of $124 billion. The size of those assets would be equal to approximately $830 billion today and the taxpayer loss about $165 billion. In Japan, the government gave "regulatory forbearance" to insolvent banks, which deteriorated even further before more painful measures were taken.
At the same time, economists and financial analysts caution against hasty measures. The past week created a sense of urgency as Fannie Mae shares plunged 45 percent for the week to barely a seventh of its 52-week high and Freddie Mac shares sank 47 percent for the week to one-ninth of its 52-week high. Based on the recent disclosure statements, investors in big mutual funds managed by Capital Research Global Investors, Fidelity Investments, Legg Mason and American Funds have suffered heavy losses. Fannie Mae and Freddie Mac have lost more than $100 billion of market value in the past year.
But unlike Bear Stearns, the two mortgage firms do not have a liquidity or cash crisis. There has been no run on the bank like the one that put Bear Stearns at the mercy of the Fed. The gap between Fannie Mae bonds and Treasury bonds actually narrowed Friday, a vote of confidence on the part of people willing to provide money for the firm to buy more mortgages from banks.
More worrisome is the sharp rise in delinquent home mortgages held or guaranteed by Fannie Mae and Freddie Mac, and that will result in some losses. But the quality of the big bundles of residential mortgages is far better than the commercial loans at many of the S&Ls or Japanese banks that failed during the earlier financial crises. At one point, the bad loans on the books of Japanese banks totaled more than a quarter of the Japanese economy, said Adam Posen, deputy director of the Institute of International Economics. Although Fannie Mae and Freddie Mac loans total 45 percent of the U.S. economy, a relatively small percentage of those are bad and the quality of new loans is probably better than the old ones now that lenders are more cautious.
Citigroup analyst Bradley Ball issued a "flash" report Friday urging regulators at the Office of Federal Housing Enterprise Oversight "to step up and express its support for management, reminding investors that the GSEs [government sponsored enterprises] continue to perform their mission and are adding less risky new business with solid margins."
If a rescue were needed, its cost would depend on the strategy used.
Much of the stock market's anxiety about the firms is linked to the regulatory requirement that the firms revise the estimated market value of the $5.2 trillion of mortgages they own or guarantee to reflect likely defaults by homeowners. On paper, this has led to big losses. Because no one knows how many homeowners will be delinquent on loans, it isn't clear whether Fannie Mae and Freddie Mac will do better -- or worse -- than expected.
Freddie Mac is planning to raise $5.5 billion by selling a combination of common and preferred stock and may suspend part of its dividend, analysts said. Many financial experts say the current market value of those mortgage bundles is lower than it should be.

If a crisis of investor confidence made it impossible to raise that money, the administration has several options. One would be to swap a portion of the troubled securities for Treasury bills, removing the immediate need to bolster capital. The cost of this approach would be whatever the losses might eventually be on the mortgage securities, possibly as little as a few billion dollars this year.
Another course would be to give the firms access to the Fed's discount window.
In the most extreme case, however, the administration could seize control, effectively nationalizing the firms and taking on their obligations. To the extent that there are losses on the firms' portfolios of loans and guarantees, those losses would add to the federal deficit. A loss of 1 percent, hypothetically, could add $50 billion to the deficit. There would be a small amount of offsetting income.
If the administration decided to curtail or shrink Fannie Mae and Freddie Mac at the same time, that could add wider economic costs, driving up unemployment and reducing federal and local government tax receipts further.
Another option would be for the administration to inject capital in exchange for shares with preference over others in receiving dividends or retaining equity value. Hoskins said that one condition of doing that should be to clearly eliminate the implicit federal guarantee for future loans. Benjamin Friedman, a Harvard University economist, would want the federal government to wipe out the remaining equity interest of existing shareholders.
Ultimately, however, any rescue plan would have to weigh the impact on the future housing market. Friedman said that removing the implicit government guarantee or shrinking the firms could change lending risk assessments and "the whole mechanism we built up over the past 30 years for channeling savings into debt against houses is going to have to be either reconstituted or the market will charge a higher interest rate."
He said that would mean fewer homes would be bought and built and there would be a change in "the ethos of the United States," which has always valued owner-occupied housing.
Staff writer Neil Irwin contributed to this report.

http://www.washingtonpost.com/wp-dyn...071202020&pos=

[Abbott (POL)]

Due nuove falle si sono aperte all'improvviso nel sistema creditizio americano, trascinando al ribasso le Borse mondiali e il dollaro. Se cede la diga, si preannuncia una crisi ancora più grave di quella esplosa l'estate scorsa, e ancora una volta il contagio è desitnato a estendersi all'Asia e all'Europa. Le due nuove falle si chiamano Fannie Mae e Freddie Mac.

Sono due nomi sconosciuti nel resto del mondo, ma familiari agli americani per la loro funzione vitale: da loro dipende l'erogazione dei mutui normali, quelli "sani", considerati sicuri fino a ieri. I loro prestiti valgono 5.200 miliardi di dollari. Per avere un'ordine di grandezza, quel volume di prestiti è pari al 58% dell'intero debito pubblico americano. Se crollano queste due istituzioni, la crisi dei mutui "subprime" sembrerà una modesta avvisaglia in confronto a questa deflagrazione. Fannie Mae fu creata nel 1938 dopo il decennio della Grande Depressione: figlia del New Deal di Franklin Roosevelt, è la prima banca di natura semipubblica che ha per unico scopo l'erogazione di mutui-casa a "prezzi politici" controllati dal governo. Il suo successo nel diffondere tra la middle class americana la proprietà delle abitazioni è il fondamento del "sogno americano". Insieme con Freddie Mac, la sua istituzione gemella, queste due maxi-banche di credito fondiario hanno perso nelle ultime tre sedute di Borsa il 90% del loro valore azionario. Un ex dirigente della banca centrale Usa le ha dichiarate "già insolventi a norma di legge".

Ieri sono dovuti intervenire a mercati aperti George Bush e il segretario al Tesoro Henry Paulson per tentare di calmare il panico. "Sono due istituzioni molto importanti", ha dichiarato il presidente. "Oggi la mia preoccupazione primaria è sostenerle", gli ha fatto eco il suo ministro. Ma neppure questi interventi hanno frenato il fuggi fuggi degli investitori. Paulson ha smentito per ora l'ipotesi di una nazionalizzazione, ma più passa il tempo e più questa appare come una delle opzioni sul tappeto. Sarebbe il più gigantesco e costoso salvataggio bancario nella storia mondiale dagli anni Trenta ai nostri giorni.

Il compito istituzionale di "Fannie e Freddie" è vitale per la salute dell'economia reale. Sono loro a finanziare il 50% di tutti i mutui americani. Ma la loro quota sale all'80% dei mutui - quelli regolari, non scadenti - fino a un valore unitario di 417.000 dollari, che è la soglia al di sotto della quale scatta l'intervento delle due banche semipubbliche. E negli ultimi mesi a causa della paralisi del business dei mutui la loro quota del credito immobiliare è salita fino al 98% di tutti i nuovi prestiti. Anche quando una famiglia ottiene il suo prestito dalla Citibank o dalla Bank of America, oppure da una piccola banca locale, in realtà il finanziatore di ultima istanza è uno dei due "gemelli". Sono Fannie e Freddie che ricomprano i mutui dalle banche ordinarie; ne garantiscono il finanziamento emettendo dei titoli obbligazionari che vengono a loro volta comprati e finiscono nei portafogli delle banche, dei fondi d'investimento, dei risparmiatori. Titoli ultra-sicuri - sempre fino a ieri - non come quella "spazzatura" che ha infestato il sistema finanziario mondiale dalla crisi dei mutui subprime.

La tempesta che si è abbattuta su Fannie e Freddie colpisce quella che doveva essere la zona solida del sistema. Ora che si è dileguata la fiducia anche in queste istituzioni onorate, il contagio della crisi può diventare spaventoso. Finora la caduta dei valori delle case ha colpito duramente le fasce sociali più deboli.

Le famiglie a rischio, quelle che stentavano ad arrivare a fine mese, erano strangolate dai mutui subprime. Ma se ora l'intero credito immobiliare si paralizza, il colpo diventa ben più esteso e più pesante. Nessuno è al riparo, neanche i cittadini dai redditi medioalti riusciranno a ottenere un prestito per la casa. Perciò Fannie e Freddie sono davvero l'ultimo argine prima di un collasso generale.

All'origine di questo disastro c'è, paradossalmente, un eccesso di fiducia. Proprio perché Fannie e Freddie erano al di sopra di ogni sospetto, facevano un mestiere che pareva di assoluta tranquillità, le autorità non hanno mai preteso che questi due istituti avessero una dotazione di capitale molto solida. I rischi del prestar soldi per la casa a clienti fidati dovevano essere bassissimi, non c'era bisogno di cautelarsi con accantonamenti eccessivi. Ma ora che i valori del mattone sono in caduta libera, nessuno è più al riparo dalla spirale delle perdite. Anche la clientela più affidabile comincia ad avere difficoltà a rimborsare le rate dei mutui. Pignoramenti e sequestri giudiziari colpiscono non più soltanto il popolo "povero" dei subprime ma anche altre categorie sociali. Di fronte all'aumento delle insolvenze, la dotazione di capitale di Fannie Freddie appare del tutto insufficiente.

Nei bilanci di Fannie e Freddie è apparso un buco di 11 miliardi di dollari in nove mesi, ed è opinione generale che questo sia solo un assaggio. L'allarme partito un anno fa dalla crisi dei subprime appare come un segno premonitore della crisi odierna che arriva ai gangli vitali. Lo ha riconosciuto il banchiere centrale degli Stati Uniti, il presidente della Federal Reserve Ben Bernanke.

In una testimonianza al Congresso ha dichiarato che "l'instabilità finanziaria iniziata nell'estate 2007 ha menomato la capacità del sistema finanziario di funzionare normalmente, e colpisce negativamente l'intera economia reale". Bernanke ha previsto che l'instabilità possa prolungarsi nel 2009. Ad accentuare la paura dei mercati, travolgendo le Borse e il dollaro, sono state le voci sempre più insistenti di un piano di salvataggio pubblico per Fannie e Freddie riprese sia dal New York Times che dal Wall Street Journal.

Già nei giorni scorsi la Federal Reserve ha compiuto un passo significativo, estendendo il credito d'emergenza al sistema bancario che era stato varato dopo il crac di Bear Stearns. Quella banca d'affari fu salvata appena quattro mesi fa: l'operazione venne presentata come un'acquisizione da parte della JP Morgan, in realtà si fece grazie all'iniezione di fondi pubblici da parte della Federal Reserve. Il salvataggio di Bear Stearns è poca cosa in confronto a quel che sarebbe un'operazione di recupero in extremis di Fannie e Freddie: nel caso estremo in cui il volume dell'esposizione di Fannie e Freddie dovesse finire sotto la responsabilità del governo federale, secondo alcuni economisti questo equivarrebbe a un robusto aumento del debito pubblico nazionale, con le inevitabili ripercussioni negative sull'aumento dei tassi e della pressione fiscale. In cambio la Federal Reserve ora chiede - un po' tardi - un potenziamento dei suoi poteri di controllo sulle banche d'investimento. Che prenda le forme di una nazionalizzazione oppure no, il salvataggio sarà un salasso per i conti pubblici.

Sotto un'amministrazione repubblicana - come ai tempi di Ronald Reagan per il crac delle Savings&Loans - avverrebbe un allargamento dell'intervento dello Stato senza precedenti dal New Deal di Roosevelt.

(12 luglio 2008)

http://www.repubblica.it/2008/06/rub...e-and-mac.html

[Winnie]

U.S. Unveils Plan to Aid Mortgage Giants

Federal Officials Offer Sweeping Proposal to Help Shore Up Fannie, Freddie
By Neil Irwin and Jeffrey H. Birnbaum
Washington Post Staff Writers
Monday, July 14, 2008; Page A01
The federal government unveiled a broad program yesterday evening to bolster troubled mortgage giants Fannie Mae and Freddie Mac, extending unprecedented support to the companies and proposing new authority to lend them money and even buy their stock.
Scrambling to announce the initiative before the trading week began, federal officials said they would allow the firms for the first time to borrow money from the Federal Reserve. Officials are also seeking permission from Congress to temporarily increase the amount the companies can borrow from the Treasury and enable the government to invest directly in the firms if conditions worsen.
The two firms, which dominate the market for U.S. mortgages, have been reeling amid investor concern that the companies might not have enough capital to handle their losses due to the rising number of bad home loans. Both firms' stocks plummeted by almost half last week.
Treasury officials said last night that they were confident Congress will be able to pass the new laws they seek by the end of the week as part of a broad housing bill under consideration on Capitol Hill.
The Federal Reserve announced that it would allow Fannie Mae and Freddie Mac to borrow money on an emergency basis. The firms, should they experience a cash crunch, will be able to exchange certain assets for cash at the Fed's discount window, a privilege long enjoyed by commercial banks and extended in March to struggling investment banks.
If Fannie Mae or Freddie Mac collapsed, it could cripple the U.S. housing market, dealing a staggering blow to the wider economy, and would saddle the federal government with massive debts if it chose to seize control of either firm.
"Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies," Treasury Secretary Henry M. Paulson Jr. said in a statement he read before television cameras last night. The strength of their debt "is important to maintaining confidence and stability in our financial system and our financial markets," he said.
A failure of either company would also rattle global financial markets because their shares and debt are widely held by pension funds, mutual funds and foreign governments.
Both companies said they were financially sound but were grateful for the confidence-building efforts. The proposals, taken together, make more explicit than ever that the federal governments backs the two federally chartered companies, even though they are investor-owned.
The changes that Treasury plans would expand the amount that Fannie and Freddie could borrow from the government in the event of cash flow problems. Currently, they can each withdraw $2.25 billion. The Treasury secretary could increase that amount at his discretion.
The Treasury secretary would also have the authority to invest government money in the firms by buying their stock, a step that would only be taken if the firms don't have enough capital and are unable to raise it on private markets.
"Use of either the line of credit or the equity investment would carry terms and conditions necessary to protect the taxpayer," Paulson said.
The new measures would give Paulson the authority to provide federal money to the firms after negotiating the conditions with them. Treasury officials stressed that this would allow the government to get the most favorable terms possible for taxpayers, potentially putting existing shareholders in a less favorable position."This is a very sweeping proposal," said Bert Ely, a banking expert and longtime critic of Fannie Mae and Freddie Mac. "This plan goes further than I thought they would go and suggests a deeper level of concern about the companies."
The initiative comes after a harried weekend of calls among officials at Treasury, the Federal Reserve and other agencies, and between Washington and Wall Street. Paulson led the creation of the plans, in sessions that went late into Friday and Saturday nights. He and Timothy F. Geithner, president of the Federal Reserve Bank of New York, held extensive conversations with Wall Street executives in preparing the initiative.
The plan aimed in part at heading off further losses of confidence in Fannie Mae and Freddie Mac on global markets and was unveiled shortly before Monday trading opened on stock markets in Asia. The announcement also came on the eve of a crucial sale of $3 billion in securities by Freddie Mac. Federal officials also worked through the weekend to ensure that the sale, a test of investor confidence, would succeed.
Government leaders opted not to inject new money into the firms directly and stopped far short of nationalizing them. Officials continue to state that the companies are financially sound and should be able to continue funding Americans' home mortgages.
A senior Treasury official said that both of his department's proposals -- the expanded credit line and the authority to make equity investments -- are envisioned as temporary, expiring after 18 months.
The official said there were extensive discussions with congressional leaders of both parties over the weekend and that "nothing suggests we will not be able to accomplish this." Key members of Congress last night endorsed the Treasury and Fed efforts, though one suggested the measures may not be adopted as quickly as the administration hopes.
Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said in an interview that he expects the thrust of what Paulson requested will be approved by the House this week and accepted by the Senate next week, allowing President Bush to sign the measure by the end of next week. He added that the plans did not amount to a "bailout." Instead they conveyed that "we don't think there's a terrible problem, but we want to reassure you if there is one, we can deal with it."
Sen. Charles E. Schumer (D-N.Y.), who chairs the Joint Economic Committee, also welcomed the plan. "It will be reassuring to investors, bondholders and mortgage-holders that the federal government will be behind these agencies should it be needed," he said in a statement. "The Treasury's plan is surgical and carefully thought out and will maximize confidence in Fannie and Freddie while minimizing potential costs to U.S. taxpayers."
Another component of the plan is to give the Federal Reserve a "consultative" role in setting the firms' capital requirements. That would enable the Fed, which works to ensure the stability of the financial system, to help set requirements on Fannie's and Freddie's finances that might lessen the risks they pose to the broader economy.
The actions mark the most extensive government intervention into the financial world since the Fed rescued Wall Street investment bank Bear Stearns from bankruptcy in March. They are also designed to allow the companies to continue their roles making funding available for Americans to buy homes.
The firms funded about 70 percent of the home mortgages issued in the first three months of the year, but investors fear that the companies do not have enough capital to weather the eventual losses on bad loans on their balance sheets. Freddie Mac's shares have tumbled 88 percent since their high in 2006, and Fannie Mae's stock is off 85 percent since its most recent peak last year.
Separately, the Securities and Exchange Commission announced yesterday that it and other regulators will immediately begin to examine whether securities prices have been manipulated by the intentional spread of false information. This action was timed in part to coincide with the government's announcement about its aid to Fannie Mae and Freddie Mac.
Also yesterday, the Federal Deposit Insurance Corp. issued a statement indicating that IndyMac, the failed California-based bank it took over Friday, will reopen today with all its functions operating normally.
Staff writer David S. Hilzenrath contributed to this report.

http://www.washingtonpost.com/wp-dyn...071301738&pos=

[Winnie]

Fannie, Freddie Deflected Risk Warnings

For Years, Critics Sounded Alarms About Firms' Thin Capital Reserves

By David S. Hilzenrath
Washington Post Staff Writer
Monday, July 14, 2008; Page D01
Though the implosion of investor confidence in Fannie Mae and Freddie Mac last week was sudden, the worries driving it have been the subject of countless warnings over many years. From a Washington think tank to the halls of Congress, from the Treasury to the Federal Reserve, from the Clinton to the Bush administrations, critics of the government-sponsored mortgage giants have long argued that they were allowed to operate with financial cushions that were too thin to support their far-reaching financial risks.
The critics argued that regulators should be empowered to require deeper capital cushions at Fannie Mae and Freddie Mac, but their persistent efforts were thwarted in the face of the companies' formidable lobbying. Many members of Congress defended the companies, contending that efforts to rein them in were tantamount to an assault on housing.
The critics' warnings finally hit home for investors last week in a frenzy of panicked selling. The companies' stocks sank to dizzying lows as fear spread that the twin titans of the mortgage market had overextended themselves, potentially requiring a government rescue.
Whether Fannie Mae, of the District, and Freddie Mac, of McLean, could ride out the housing crisis on their own remained to be seen. They said their finances were sound, and their chief regulator was trying to allay the fears. But any sense that their shares were the safest of investments had clearly been shattered.
The government created the firms to keep money flowing to mortgage lenders. They do that by buying mortgages and pooling them into securities for sale to other investors, guaranteeing to pay the investors if the borrowers default.
Their unusual status was the key to their business. The fact that they are federally sponsored led the financial markets to believe the government would cover their debts if they were unable to do so themselves. The assumption that they were virtually as reliable as the U.S. Treasury enabled them to borrow at low rates and fund their investments with cheap money. It also helped them charge a premium for their mortgage guarantees.
As Alan Greenspan described in 2004, the result was rapid growth, high concentrations of risk and insulation from the discipline the market applied to ordinary companies.
"Unlike many well-capitalized savings and loans and commercial banks, Fannie and Freddie have chosen not to manage that risk by holding greater capital," Greenspan, then chairman of the Federal Reserve, told lawmakers in 2004. To keep them from undermining the financial system, "preventive actions are required sooner rather than later," he added.
As of March, when the government provided its most recent snapshot, the companies had $81 billion of capital to absorb potential losses -- a big number, but only a fraction of their $5.1 trillion of investments and loan guarantees.
Fannie Mae argued that housing was such a safe investment that it didn't need as much capital as banks, which make a wide variety of loans. But having all their eggs in one basket left Fannie Mae and Freddie Mac all the more vulnerable to a downturn in the housing sector. As home prices have plunged and defaults and foreclosures have soared, the companies have lost billions of dollars and face the prospect of losing billions more.
The political battle lines were drawn by 2000, when a senior Clinton administration official called on Congress to take steps that might have diminished the companies' special status. Treasury Undersecretary Gary Gensler also urged that regulators be given more power to set capital requirements for Fannie Mae and Freddie Mac.
The companies fought back.
"We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie Mac spokeswoman Sharon J. McHale said at the time.
Even after Freddie Mac was shown to have manipulated earnings, Congress remained deadlocked over legislation to create a stronger regulator. Opposing one such bill in 2004, Sen. Charles E. Schumer (D-N.Y.) argued that a hostile regulator could use the proposed powers to choke the companies.
When a federal regulator accused Fannie Mae of cooking its books to increase bonuses, lawmakers lined up to denounce the regulator. Rep. William L. Clay Jr. (D-Mo.) said a House panel had no business holding a hearing on the matter -- "unless this is truly a witch hunt." Fannie Mae was later found to have overstated profits by $6.3 billion.
Former representative Richard H. Baker (R-La.), who chaired a subcommittee that oversaw the companies, struggled for years to rein them in and tried to show they were being managed for the enrichment of their executives. When Baker obtained data on Fannie Mae pay, a lawyer for the company threatened him with personal liability if he made it public, Baker recounted last week.

Critics of the two firms included former Reagan administration official Peter Wallison, who crusaded against them at the American Enterprise Institute, and a coalition of financial companies whose interests often conflicted with those of Fannie Mae and Freddie Mac. The Bush administration pushed a similar agenda.
"The simple truth is that there is no need for our financial markets to be exposed to this risk," Emil W. Henry, Jr., an assistant Treasury secretary, said in 2006.
On the other side, a top lobbyist for Freddie Mac held more than 75 fundraisers for members of the House Financial Services Committee in an 18-month period several years ago, raising nearly $3 million, according to records brought to light in a federal investigation. The lobbyist's fundraising dinners typically featured the committee's Republican chairman at the time, Michael G. Oxley of Ohio.
Those and other activities led to a record $3.8 million fine against Freddie Mac in 2006 for allegedly violating federal election law.
In an internal memo in 2004, Fannie Mae executive Daniel H. Mudd affirmed what the company's critics had long contended: In the political arena, "we always won" and "we took no prisoners."
"We used to, by virtue of our peculiarity, be able to write, or have written, rules that worked for us," wrote Mudd, now the company's chief executive.
As the housing market boomed in recent years, Fannie and Freddie, like many lenders, took on riskier loans. Freddie Mac executives have said they loosened lending standards to avoid losing market share.
Since the boom turned to bust, the government in some ways has given the companies freedom to dig themselves into a bigger hole. As other sources of funding for mortgages have dried up, the government has become more dependent than ever on Fannie Mae and Freddie Mac to keep the market functioning, and it has reduced their capital requirements.
Citing accounting and other issues, some analysts said the government has allowed Fannie Mae and Freddie Mac to paper over the extent of their problems, contributing to the market's loss of faith in them last week.
Freddie Mac spokeswoman McHale denied that allegation, a Fannie Mae spokesman declined to address it, and a spokeswoman for the Office of Federal Housing Enterprise Oversight, the companies' main regulator, did not respond to a request for comment.
"While Administration officials continue to claim the companies are adequately capitalized, the markets do not believe this," analyst Joshua Rosner of Graham Fisher & Co. wrote in a Friday report.
Ironically, the sell-off last week came as Congress was finally moving toward passing a bill containing the sort of preventive measures the critics sought -- among them, greater regulatory control over the companies' capital.

http://www.washingtonpost.com/wp-dyn...071301738&pos=

[Adam5]

o fanno fallire freddie e fannie o raddoppiano il debito pubblico?Non ci sono altre possibilità?

[-Duca-]

mmm.. non mi pare..

[Feliks]

o fanno fallire freddie e fannie o raddoppiano il debito pubblico?Non ci sono altre possibilità?

No.

il raddoppio del debito pubblico però sarebbe teorico, visto che non è che TUTTI i mutuatari andranno in default.

[Abbott (POL)]

o fanno fallire freddie e fannie o raddoppiano il debito pubblico?Non ci sono altre possibilità?

direi di no.

[Abbott (POL)]

il raddoppio del debito pubblico però sarebbe teorico, visto che non è che TUTTI i mutuatari andranno in default.

questo è vero, anche se indubbiamente ci sarà comunque un grosso aumento del debito.