Fannie, Freddie Edge Back From the Brink

He and Bush say it's urgent to act now to stabilize markets

(NEWSER) - Henry Paulson confirmed today that he is working on a "bold" plan to buy bad loans from banks, the Wall Street Journal reports. Such a plan would cost taxpayers “hundreds of billions of dollars,” Paulson said, but he believes it is necessary to stabilize the economy. “The ultimate taxpayer protection will be the stability this troubled asset-relief program provides to our financial system,” he said. More»

Madcap weekend recasts Treasury Secretary in Clintonian mold

(NEWSER) - Henry Paulson had a very busy weekend. The treasury secretary had been formulating contingency plans for bailing out beleaguered Fannie Mae and Freddie Mac for weeks, but Friday’s crisis came before those plans were in place, the Wall Street Journal reports in a reconstruction of events leading to the rescue, culminating in the frenzied weekend scramble to negotiate the particulars with the Fed and Congress. More»

Very quietly, the sharks are making a killing

(NEWSER) - With the rest of the world wringing its hands over fears of a Fannie Mae or Freddie Mac collapse, one tribe on Wall Street is smiling: the short sellers. Investors have bet against Fannie and Freddie in growing numbers as the two mortgage lenders' positions grew more precarious. But handsome returns as the stocks plunged 70% this year have also brought unwanted attention, the New York Times notes. More»

(NEWSER) - Executives at government-owned mortgage giants Fannie Mae and Freddie Mac are scheduled to receive six-figure retention bonuses, but Barney Frank wants the payments canceled, MarketWatch reports. “In this troubled economy, and in this job market, it is difficult to imagine that the companies would not be able to find competent and talented replacements for anyone who chooses to leave,” the House Financial Services chair said in a letter to a federal regulator. More»

New plans simply can't be negotiated in time

(NEWSER) - Henry Paulson’s bailout plan isn’t perfect, writes Joe Nocera in the New York Times, but we have to enact it anyway because time has run out. “With every passing day, Congress is fiddling while Rome is burning,” says Nocera, just last week a bailout opponent. Lawmakers need an agreement Monday, he predicts, to avoid a Wall Street revolt. “No deal, no credit markets. It’s as basic as that.” More»