Finally, the Treasury does something intelligent. Dismissing the top executives at Fannie and Freddie. Suspension of dividends. Demotion of current stock to junior status. Reduction of mortgage backed holdings in the next 10 years. Infusion of cash to maintain liquidity.
It's a start. As long as lenders return to the high credit standards they should have been using all along (example guidelines shown here in painful detail), I don't even mind spending my precious tax dollars to help someone buy a home. There are plenty of hard working, deserving people who should be homeowners, if only to reduce my share of property taxes :-P
But seriously, one needs to finish what is started. This should be run as vigorously and relentlessly as a Chap 11 Reorg. Cuts need to be made, heads have to roll, and ultimately, the key lies with a single question: should these enterprises become completely nationalized or should the assets be sold to private investors? Either way, it's pretty clear the old framework is dead. I just hope our government is able to carry out a proper burial.
1 comment:
I heard about all the Fannie Mae yaya when I was in Canadia...it really was *that* big. Its an interesting concept...I never thought I would say I wish the government ran stuff, but maybe mortagages would be good...as long as someone like Greenspan is in charge. Now, if we can only get them to do the same for internet, wireless phones, and airplanes, we'll be in great shape. (Wow...maybe I am a traditional democrat after all!)
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