by D. Cupples | Earlier this year, we saw the federal government intervene to essentially bail out Bear Stearns (or at least, to help JP Morgan buy Bear Stearns). Now, it looks as though the federal government is set on bailing out the mortgage giants Fannie Mae and Freddie Mac.
The New York Times reports:
"Senior officials from the Bush administration and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, and told them that the government was preparing to place the two companies under federal control, officials and company executives briefed on the discussions said.
"The plan, which would place the companies into a conservatorship, was outlined in separate meetings with the chief executives at the office of the companies’ new regulator. The executives were told that, under the plan, they and their boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said.
"It is not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars and make any rescue among the largest in the nation’s history." (NY Times)
Getting rid of Fannie and Freddie's CEOs doesn't seem like much. What I'd like to see is disgorgement -- of all executives at Fannie Mae and Freddie Mac who saw personal financial gains while running the two quasi-governmental entities into the ground.
Memeorandum has commentary.
Other Buck Naked Politics Posts:
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* Jack Abramoff Gets 4 years, Halliburton Exec Gets 7
* Does the GOP Want to Lose this Election?
* "Compassionate" Conservative Palin Slashed Teen Moms' Funding
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