I still find it kind of funny that anyone thinks the president has real power. About all he can do is cajole, threaten, pardon and veto. Congress has all the power and for years has been ignoring potential problems. Check this out, written in Feb 2004 in the NY Times.
" Alan Greenspan, the chairman of the Federal Reserve, warned on Tuesday that the nation's two big government-sponsored mortgage institutions pose a ''systemic risk'' that could cost taxpayers dearly.
Mr. Greenspan said that Fannie Mae and Freddie Mac, which buy up and repackage billions of dollars' worth of mortgages every year, have grown so rapidly and accumulated so much debt that they cannot adequately hedge against the risks of financial crises.
The Fed chairman said both companies, which hold about $2 trillion worth of obligations tied to home mortgages, have grown much faster than their competitors because investors think the federal government will bail them out in a crisis.
Mr. Greenspan said this ''implied subsidy'' has been a boon to the companies' shareholders but provided only modest benefits to homebuyers in the form of lower mortgage rates.
The danger, he said, is that the companies are using this implicit federal backstop to assume more risk and finance their expansion through increased debt. "
http://query.nytimes.com/gst/fullpa...6A15751C0A9629C8B63&sec=&spon=&pagewanted=all
DH and I are retired and most of our money is in the stock market, we're toast if it tanks too far but I refuse to panic. What I can't believe is the rhetoric coming out of the politicians on both sides, including the president who are calling this a doomsday scenario. That in itself will create panic on wall street.
I suspect there will be a buying spree before the week is out, if not the day.
" Alan Greenspan, the chairman of the Federal Reserve, warned on Tuesday that the nation's two big government-sponsored mortgage institutions pose a ''systemic risk'' that could cost taxpayers dearly.
Mr. Greenspan said that Fannie Mae and Freddie Mac, which buy up and repackage billions of dollars' worth of mortgages every year, have grown so rapidly and accumulated so much debt that they cannot adequately hedge against the risks of financial crises.
The Fed chairman said both companies, which hold about $2 trillion worth of obligations tied to home mortgages, have grown much faster than their competitors because investors think the federal government will bail them out in a crisis.
Mr. Greenspan said this ''implied subsidy'' has been a boon to the companies' shareholders but provided only modest benefits to homebuyers in the form of lower mortgage rates.
The danger, he said, is that the companies are using this implicit federal backstop to assume more risk and finance their expansion through increased debt. "
http://query.nytimes.com/gst/fullpa...6A15751C0A9629C8B63&sec=&spon=&pagewanted=all
DH and I are retired and most of our money is in the stock market, we're toast if it tanks too far but I refuse to panic. What I can't believe is the rhetoric coming out of the politicians on both sides, including the president who are calling this a doomsday scenario. That in itself will create panic on wall street.
I suspect there will be a buying spree before the week is out, if not the day.
