A bailout, or just prolonging the inevitable?
Monday, July 14th, 2008Yesterday the White House and the Federal Reserve took steps to prevent Fannie Mae and Freddie Mac from going the way of the Bear. Bear Stearns, that is.
Treasury Secretary Henry Paulson said the “global reach of Fannie and Freddie necessitated unprecedented action”. In other words, the government believes that Fannie May and Freddie Mac are too big to fail. Must be nice.
Technically, the treasury increased its existing line of credit to Fannie and Freddie. On top of that, the treasury was given the power to buy the two companies stock.
Wow.
So much for a free market economy!
So I suppose the question is, how much of …
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