Feb 07, 2010

"The Obama administration missed its deadline - when it submitted its budget request - for deciding what to do about Fannie Mae and Freddie Mac, the two government-sponsored mortgage packagers. The companies, now under government control, ought to be set on a path to early extinction.

Their recklessness is one reason that the housing market bubbled and burst. As long as they are believed to have a government guarantee, it’s hard to see what would guarantee future prudence. The nation’s huge financial sector should be able to fill their role.

It was political meddling that got them into this fix, meddling from those who pressed banks and others to give mortgages to people who had little chance of ever paying them back. The issuers sold the mortgages, very often to Fannie and Freddie."

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