The White House, The Fed, The Treasury, and leaders in Congress spent the weekend in a feverish effort to bail out or at least "back up" Fannie Mae and Freddie Mac, the government sponsored entities that hold one half of the nation's mortgages. The plan includes giving the two entities access to the Fed's "discount window" and proposes a credit line of up to $300 Billion, potentially saddling the government, and ultimately taxpayers with an enormous liability. The move will likely, in the short term at least, shore up confidence in the entities. While the move raises many philosophical questions about the government's increased role in the overall economy, there is little doubt that the solvency of Freddie and Fannie is critical to keeping our economy from falling off a cliff. More details to follow.
Treasury Acts To Save Mortgage Giants (NY Times)
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