发布者: chrislau2001 | 发布时间: 2008-9-12 12:56| 查看数: 2262| 评论数: 1|

You Can't Handle The Fannie/Freddie Truth

As predicted, my Sunday column that praised the Treasury's takeover of Fannie Mae (FNM) and Freddie Mac (FRE) incited outrage from many readers.

Typical comments? 'A horrible deal for Americans.' 'A sad day for America.' 'Pity the taxpayer.' 'Appeasement for China.' 'It's time for a taxpayer revolt.'

As for who's to blame? Anybody and everybody. Congress, Wall Street, Greenspan, Bush, Clinton, Hank Paulson, Freddie's and Fannie's CEOs and the Chinese.

Of course, there is plenty of blame to go around. But let's not just point fingers. It is time to take a hard look in the mirror and see where the blame really lies.

- Truth No. 1: Congress gives the people what they want.

Fannie and Freddie are government-chartered institutions supported by a Congress that answers to you. But how much do you know or care about where politicians stand on Fannie and Freddie? Did your Congressman and Senators accept campaign contributions from the GSEs? Did they fight efforts at overhauling the GSEs over the years?

Odds are you don't know. But odds also are that your Washington representatives were in the crowded ranks of Fannie and Freddie's boosters. Why? Because Fannie and Freddie gave you, the American citizen, what you wanted: cheap home mortgages backed by the U.S. government.

Today, you may say, 'Oh, but I don't want to bail out Fannie and Freddie.' And you may shout it to your Congressman. But it is too late. Fannie and Freddie will soon run out of money. And you-as guarantor for their $5 trillion in debt-are the piggy bank.

- Truth No. 2: Wall Street helps people get what they want.

It is easy to conjure up visions of Wall Street money-men huddled at a country club concocting the real-estate bubble. The truth isn't so neat.

Certainly, Wall Street benefited from the mortgage securities boom of the past 20 years. And Wall Street bankers undoubtedly were instrumental in hyping the subprime and Alt A mortgage markets.

But Wall Street alone can't cook up a speculative housing frenzy. That requires lots of ingredients, like a loose Federal Reserve, reckless homebuilders and lax mortgage lenders. Throw in Fannie and Freddie-and you're getting there.

But of course, the key ingredient is you. Without millions and millions of eager American home buyers, sellers and traders, there would never have been a housing bubble.

Of course, you personally may not have lied on a mortgage application. You may not have gambled on a risky adjustable mortgage. You may not have bought a handful of condos in Las Vegas or Miami. But plenty of your fellow Americans did.

In fact, too many did. But did you ever question why home prices in your area were rising 20% or 30% a year?

- Truth No. 3: Hank Paulson did the only thing he could.

You might like to think that there was an alternative to 'conservatorship,' but there really wasn't. Put yourself in the shoes of the Treasury secretary.

PIMCO bond boss Bill Gross goes public with a boycott of Fannie and Freddie paper. The global creditors of your multitrillion dollar mortgage market start to walk away. What would you do if your lenders stopped lending?

A Chapter 11-style bankruptcy was one alternative. Wipe out the equity holders. Force the Fannie and Freddie debt holders to take a haircut and convert their debt into equity. Let the American taxpayer off the hook.

But this would have amounted to a U.S. government default and financial Armageddon. Creditors would run screaming from our indebted nation at the speed of light. And the unhappy taxpayer would be even more unhappy. He would have to finance all the debt of the U.S., not just those of Fannie and Freddie.

- Truth No. 4: We are all to blame.

Why is the U.S. a debtor nation?

Because we like to be. We seem to like things we really can't pay for. Material things like cars that burn too much gas and houses that cost too much money. And huge programs like Social Security and Medicare that put us deeper in debt.

But how many Americans would vote for the politician that promises to curtail or end such programs? Or vote for the politician who argues that not every American is deserving of a mortgage and their own home?

Would we believe the real-estate broker who tells us a house was overpriced? Or the banker who says we should take a smaller fixed-rate mortgage even though we qualified for a bigger and cheaper ARM?

This is the truth we as Americans can't handle. We believe what we want to believe. In the end, we are all to blame.

Evan Newmark


chrislau2001 发表于 2008-9-12 12:56:45
正如我所料,我周日那篇表扬财政部接管房利美(Fannie Mae)和房地美(Freddie Mac)的专栏惹怒了许多读者。

看看一些典型的评论吧:“对美国人来说一笔糟糕的交易”、“对美国来说悲哀的一天”、“可 的纳税人”、“对中国的绥靖”、“是纳税人造反的时候了”。









当然,过去二十年间华尔街曾经受益于抵押证券的繁荣。华尔街银行家对活跃次级抵押贷款及Alt A抵押市场无疑起到了“功不可没”的作用。







太平洋投资管理公司(PIMCO)的老板格罗斯(Bill Gross)对“两房”债券的抵制态度已不是秘密。价值数万亿美元按揭市场的全球债权人开始退避三舍。如果你的贷款人不再放贷,你会怎么办?









Evan Newmark
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