Sunday, September 7, 2008

Fannie and Freddie

Today we learn that by next weekend the Fed will announce a takeover of Fannie Mae and Freddie Mac, the two home mortgage giants. Both are bleeding money, having lost about 80% of their value. They hold over one trillion dollars in direct debt.

So the Treasury Department plans to bail the two companies out, costing perhaps $20 BILLION.

So, the two CEOs of course have done a terrible job. I don't think there is any doubt when losses mount to totals we are looking at for both companies.

Now you might want to know how much salary each was paid for the terrible job they did.

Daniel Mudd, CEO of Fannie Mae, made $11.8 million in 2007. Richard Syron, CEO of Freddie Mac made $18.3 million plus perks like paid travel for his wife.

I ask this: Why should or would these huge companies worry about bleeding money when the Fed is bound to come along to bail them out. It happens over and over again and who pays for it? You and I. Hey, how about giving that money back to the tax payers to help them get out of debt? No, we'll give it to the crooks who created this mess to begin with. The banks and other lenders were greedy and lent money irresponsibly. Now many Americans cannot afford their mortgage payments. Does the Fed help them out? Nope, they bail out the crooks. Nice!

Message to the next president: How about REAL change. How about making the irresponsible RESPONSIBLE!


mitchelln said...

Blimey. We Brits thought the collapse of Northern Rock was bad enough. That's cost us tax payers £110 billion so far. That's about £3500 for each UK tax payer.

So what does this US disaster cost each tax payer?

aekayser said...

The Financial Times reported today that the ratings for US securities dropped below most top ranked developed nations. No price tag to the US citizenship has been placed as yet, but you can bet it will be very high. This is a trillion $ deal.