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Bailout Roundup III

A week ago on September 22, we started blogging about the current financial crisis involving Fannie Mae and Freddie Mac facing the country, and expected to be able to merely add additional links to references about another aspect of the crisis. However, there were just too many news articles. Then on September 25, we linked to two GAO reports that recommended streamlining oversight. Hopefully, a “round-up” approach will improve the tracking of the many items available to understand the causes and solutions for the crisis. Future posts in this series will use Roman numerals. (All dates are 2008 unless noted.)

  • Wall Street Journal, September 9, writes: “Taxpayers are now on the hook for as much as $200 billion to rescue Fannie Mae and Freddie Mac, and if you want to know why, look no further than the rapid response to this bailout from House baron (Rep.) Barney Frank (D-MA).”
  • Wall Street Journal, September 25. Contributor Andy Kessler, a former hedge fund manager, argues the “Paulson Plan” might “pull off the mother of all trades, which could net a trillion dollars . . . for the United States Treasury.”
  • Wall Street Journal, September 26. Arthur Levitt, former SEC chairman, writes “The only way we can bring sanity back to the credit and stock markets is by restoring public trust. And to do that, we must improve the quality, accuracy, and relevance of our financial reporting. This means resisting any calls to repeal the current mark-to-market standards.”
  • Forbes Magazine, July 28. Steve Forbes writes that the “rescue of Fannie Mae and Freddie Mac is only a stopgap. Unless fundamentally restructured, these two debt-bloated giants will sooner or later blow up.”
  • Thinking on the Margin, September 24. Summary of a letter “(a) group of prominent economists sent . . . to Congress expressing deep concern about Paulson's plan to deal with the financial crisis:”
We hope ACTA members find this new approach more useful.

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