Friday, August 22, 2008

Former FDIC chief wants Fannie Mae, Freddie Mac privatized

What's this talk I hear of the government backing these companies?!?

Government mandated corporations don't work. They go against the tide of things and, eventually, will fail.

The former head of the FDIC recognizes that fact. Bill Seidman told MarketWatch yesterday that, "We need a plan for breaking up Fannie and Freddie and selling them to private investors, so that the government isn't the biggest backer of the housing market."

A government bailout of Fannie and Freddie would dwarf the S&L fiasco, he said. The estimated cost would involve assets between $5 trillion and $6 trillion. And as we have learned, such estimates tend to be low.


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