The Davidian Post

Is it just me or did I get this wrong? The Fed’s takeover of these GSE’s signals a disaster to me. Yet, the stock market responds positively. Yes, I do understand that this might seem like good news but in reality it is affirmation of the worse kind of news. Fannie and Freddie are pretty much bankrupt and worse, they have a huge debt from which they can’t readily get out off and of course it could collapse the worlds credit markets. Our government steps in and says we will take care of your debts but you will pay us hefty interests for your debt service. This is a solution? This is temporary till we find a solution. This doesn’t sound to like a cure. More like “maintain the course”. Why do I suddenly feel deja voodoo.

I wonder what would have happened if the Fed had actually given the money to the homeowners that can’t pay their mortgages. It would have trickled up to Freddie and Fannie after all, and along the way would have nourished the entire tree from the roots up. Gee! I feel that deja voodoo thing again. No! My mistake, it was that trickle down thing. The Feds action reminds me of day old rose’s. If you were to pluck off the wilted outer petals the fresher inner fresher petals show. This made the dying flower look a lot better.

Filed under: Editorial