QUOTE AND NEWS
MarketWatch  Jun 30  Comment 
Fannie Mae and Freddie Mac’s regulator says few of the delinquent mortgages it’s sold to investors have reportable outcomes.
MarketWatch  Jun 16  Comment 
Inspector general smacks mortgage giant’s ‘excessive spending’ for its new Washington, D.C. office.
Wall Street Journal  May 24  Comment 
The core businesses of the mortgage-finance companies are remarkably healthy. But a mix of accounting and politics could cause one or both to need another taxpayer bailout.
MarketWatch  May 20  Comment 
Fannie Mae to reward borrowers who don’t keep high credit card balances starting in June
New York Times  May 20  Comment 
Newly unsealed documents cast doubt on the Treasury’s justification for sweeping the mortgage giants’ profits, exposing the perils of letting the government act in secret.




 

I suppose a priapicnl reduction program would be better than nothing, but there is always the risk of unintended consequences or even operational failure when attempting such a specific intervention. Why not let monetary policy do the work in a continuous, predictable, and agnostic fashion? It would deliver benefits not only to home owners, but also by reducing the real return on the many large cash-equivalent investments amassed by corporations like Apple ($60B last I checked), spurring them to put funds to more productive use. And of course, monetary policy can benefit from the Chuck Norris effect. Fiscal policy hasn't exactly inspired such reactions of late.

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