Friday, July 18, 2008
An implicit federal government guarantee backing up Fannie Mae and Freddie Mac became an explicit one this week. Will it be enough? Professor Anthony Sanders of Arizona State University fills us in.
Signs at Fannie Mae, Freddie Mac buildings (Getty Images / Marketplace)
More on The Economy, America's Financial Crisis
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I own a home which I'm in the process of refinancing under the Keeping Homes Affordable program. As part of the refinancing... my bank wants to lower my line of credit from $28,000 to $10,000 and they want to freeze it for the time being... I'm very uncomfortable with this as it has been serving as my "safety net"... What should I do? Laura, Minneapolis, MN Read Chris Farrell's answer »
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From Phoenix, CA, 07/22/2008
To the previous poster - I have great empathy for anyone harmed by the housing decline and subprime explosion. My point was that it wasn't the fault of Fannie and Freddie. The GSEs are fundamentally sound unless housing prices continue to deteriorate (say, down another 20%).
Concerning "Let them eat cake" (which was actually made by Rousseau rather than Marie Antoinette), I would never say that. Again, hysteria by the press and anti-GSE people is not helping and, in fact, throws gas on an already started fire. If Congress pulls the plug on the GSEs, then we will REALLY see pain and suffering and I do not want that to happen.
But I appreciate your thoughts.
From Omaha, NE, 07/20/2008
Can Anthony Sanders be serious? Maybe I'm being harsh here, but his advice to "have some wine and chew some Bree" strikes me as the modern equivalent to "let them eat cake". Does Mr. Sanders have any empathy at all for the people caught in this tsunami that he and his his Wall Street buddies have helped create?
From Scottsdale, AZ, 07/19/2008
Its great to hear someone who actually understands financial markets talking about Fannie Mae and Freddie Mac. He is remarkably clear and concise. I have seen him interviewed in The Economist, Forbes, the Wall Street Journal and other news outlets and he is always right on target.
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