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Freddie, Fannie and an old blog entry.

Lehman Brothers files for bankruptcy, Freddie Mac and Fanny Mae have been nationalized, but in world. Seems like the financial crisis will stay with us for a while. Forclosures seem to become a hot US election topic. How many of them can be avoided if morgage payments get substantially lower. But how? Socialism anyone. If the government would own your house it could lower your payments. But wait... they do own it now and I might have been almost right, except it's not about additional consumption, but basic capital service.

The old Chinese curse holds true: "May you live in interesting times"

Posted by Stephan H Wissel on 15 September 2008 | Comments (1) | categories: After hours

Comments

posted by Jerry Carter on Wednesday 17 September 2008 AD:
The trend to nationalize is indeed worrying. After all, that's what Chavez has been doing and has been getting scourged for it in the US.

I think what needs to happen is that people need to a) be required to diversify their retirement and savings. That's simple fiscal sense but it's the most effective stop gap against losing it all when banks fail. I'm diversified four ways to help protect my families future financially. b) banks that are failing should be allowed to do so. The power of a free market is that natural selection is actively at work. Bad business "genes" leads to attrition of a presumably flawed banking practice. Finally, c) the debt to capital ratio needs to be more like 1:1 or 9:8 rather than the present day 9:1 to 40:1. That simple regulation alone would stop the blatantly stupid predatory credit and banking practices going on. A few simple requirements is what we need, not wholesale nationalization and regulation. Hopefully, someone in power will agree.