Fannie and Freddie symptoms of larger problem

[Omaha Steve]

AFL-CIO economist says this system amounts to "Socialism for the rich and capitalism for the poor"

http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=1879&updaterx=2008-07-15+11%3A56%3A34

The Federal Reserve and the Treasury announced steps on Sunday to shore up mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as losses from their mortgage holdings threatened their financial survival. Congress has been asked to approve a sweeping rescue package that would inject billions of federal dollars into the the faltering companies. Separately, the Federal Reserve said that it would promote up to $300 billion dollars of short-term low interest loans to Fannie and Freddie. AFL-CIO chief economist, Ron Blackwell, emphasized both the need to bail out Fannie and Freddie and the urgency of addressing the systemic problems that produced their collapse. He says that the current system amounts to Socialism for the rich and Capitalism for the poor.
Bio

Ron Blackwell is Chief Economist for the AFL-CIO, where he has also worked as Director of Corporate Affairs. Before coming to the AFL-CIO, Blackwell was assistant to the president of the Amalgamated Clothing and Textile Workers Union, and chief economist of UNITE (Union of Needletrades, Textiles and Industrial Employees). Prior to joining the labor movement, Blackwell was an academic dean at the New School for Social Research in New York (now the New School University), where he taught economics, politics and philosophy.
Transcript

HENRY PAULSON, US TREASURY SECRETARY: As you know, 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. Their support for the housing market is particularly important as we work through the current housing correction.

MATTHEW PALEVSKY, JOURNALIST, TRNN: The Federal Reserve and the Treasury announced steps on Sunday to shore up mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as losses from their mortgage holdings threaten their financial survival. Congress has been asked to approve a sweeping rescue package that would inject billions of federal dollars into the faltering companies. The Federal Reserve has also said that it would promote up to $300 billion in short-term, low-interest loans for Fannie and Freddie, expedited authority from Congress to expand its current line of credit to the two companies and to make an equity investment in the companies if necessary. Adding to the financial turmoil over the weekend, the FDIC took over operations of IndyMac, a failing bank with over 265,000 customers.

JOHN BOVENZI, COO, INDYMAC FEDERAL BANK: As you know, on Friday, IndyMac Bank was closed and the FDIC was appointed its receiver. What that means is that, over the weekend, we have been working to reopen the bank first thing Monday morning.


FULL story and video at link.

[BlooInBloo]

1. More IndyMac fun....

http://calculatedrisk.blogspot.com/2008/07/its-fdic-so-who-gives-damn.html

[Trillo]

2. Ron Blackwell mentions nationalizing Fannie and Freddie.

"If you're calling in taxpayer support for this, then you've got to give the taxpayer some part of the benefit when this institution recovers."

[lib2DaBone]

3. Republican Math...

Socialize the Debt.. Privatize the Profits....It's how the Republicans Operate... and the Sheeple go.... Ba-ah-ah-ah-ah-ah-ah