Fannie Mae & Freddie Mac Bailout

Chairman of the House Finance Committee Barney Frank (Dem)-MA has confirmed that the government will step in to bail out ailing companies Fannie Mae & Freddie Mac who have lost over 14 billion in the last 4 quarters.

Initial speculation of a takeover sent share prices plummeting after close of Wall Street on Friday. The potential cost to tax payers is estimated at somewhere around 25 Billion.

Both CEO's Daniel Mudd of Fannie Mae & Richard Syron of Freddie Mac are expected to resign.

It is unknown at this time just how the restructuring will take place.

Ordinarily I would not comment or provide an editorial on the effects of this bailout but lets just see if in hind sight I will be correct or not:

Joe Shareholder of Fannie Mae & Freddie Mac....Thanks for playing but your investment portfolio is now worthless.

CEO's and other corporate executives of Fannie/Freddie, exercise your stock options, retirement packages and balloon payments and walk away with millions & millions of tax payer dollars.

Reminds me of the Savings and Loan Scandals of the 1980's and the Keating 5 (refering to Charles Keating that ran Lincoln Savings and Loan) who were suspected of corruption.

John McCain R-AZ
Dennis DeConcini D-AZ
Alan Cranston D-CA
Donald Riegle D-MI
John Glenn D-OH

The Savings and Loan scandal lead to 747 Savings and Loans going under a complete collapse of the FSLIC and a cost to taxpayers of 124 billion dollars. Lincoln Savings & Loan and parent company American Continental Corporation went bankrupt on April 14, 1989. Close to 21,000 elderly and Senior investors lost most off their life savings totaling nearly 285 million dollars.

Footnote: Senators John McCain & John Glenn were cleared of all allegations.






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