Scroll for updates…severance for CEOs?
What I wrote in July:
I’ve long warned of the inexorable bailout frenzy in the wake of last year’s stimulus-palooza. The Fannie/Freddie rescue will make the Bear Stearns bailout look like chickenfeed.
Well, welcome to the MOAB nightmare come true.
Taxpayers will be on the hook for $200 billion — with a “B” — in capital and credit lines to both Fannie Mae and Freddie Mac. And that’s just the starting estimate. When do government projections ever get it right? And when do they ever overestimate the cost to taxpayers?
Both parties will twist themselves in semantic pretzels to argue that this isn’t a massive, socialist bailout scheme. Cut the bull. It walks and squawks like one because it is one. This is more of the same profit-side, crony capitalism and loss-side socialism. Who benefits? Liberal corruptocrats like Jamie Gorelick.
And what do we get for our money?
The fundamentals of the housing market will not change. We’ll pay for government intervention to keep home prices artificially high, while helping the two federally-sponsored enterprises rescue some of the nation’s most toxic loans.
When I called for the “Suck It Up” solution to the housing crisis, I didn’t mean that government should suck up our money. Crikey.
Peter Viles at L.A. Land: “The larger question, it seems to me, is whether the government’s rescue brings some stability back to the entire financial industry, or just buys the government time before the next unprecedented, historic bailout of the next institution deemed “too big to fail.” Banks are sitting on piles of bad debt and are unable to raise money and increasingly unwilling to lend; does the Fannie-Freddie bailout change that?”
Paging Jim DeMint!
The chief executive officers of Fannie Mae stand to collect millions of dollars in severance compensation in the wake of the government’s takeover of the mortgage giants, The New York Times reported. Fannie Mae’s Daniel H. Mudd could get $9.3 million in severance pay, retirement benefits and deferred compensation if his dismissal is “without cause,” the consulting firm James F. Reda & Associates told the Times. And Freddie Mac’s Richard F. Syron could get a package valued at $14.1 million after a clause was added to his employment contract in mid-July, the Times reported. Investors are objecting to the prospect of the big payouts, the Times reported, adding that whether the executives actually will collect remains unclear.