Paulson should consider receivership for Fannie, Freddie: re

[Ognir]

Create the problem, then call on the government & congress for solutions, sound familiar?
Socialism aka different version of communism



Paulson should consider receivership for Fannie, Freddie: report

(Reuters) - The U.S. Treasury Secretary could make greater progress toward a safer financial system by putting Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) into federal receivership, the Wall Street Journal said on Tuesday.

If the current law doesn't give Henry Paulson that power, he should seek it from Congress, the newspaper said in an editorial on its website.

The Treasury Department and the Federal Reserve on Sunday offered massive aid to bolster confidence in the companies and head off a potential financial market meltdown.

Together, the country's two biggest mortgage firms finance about $5 trillion in U.S. home loans, or about half of the total, so are too big to fail, the Wall Street Journal said.

"The question has been how to manage and regulate these monsters in a way that minimizes risks to the larger financial system and taxpayer," the editorial said.

Paulson wants Congress to give the government more power to rein in the two companies, including with a capital injection of preferred stock if required.

"This is progress, but it's not aggressive enough given the risks. He could make more progress more rapidly toward a safer financial system by putting the companies in federal receivership," the newspaper said.

Paulson could then appoint a prominent financial figure with bipartisan credibility as a receivership czar, with a mission to protect taxpayer interests.

A czar would have the power to replace the companies' management and directors, as well as give priority to taxpayers above the current private shareholders if the government does inject capital, the newspaper said

http://www.reuters.com/article/newsOne/ ... 2020080715