Posted on 06/15/2006 12:17:23 PM PDT by Hydroshock
WASHINGTON (MarketWatch) -- The Bush administration continued to turn up the heat on government-sponsored housing giants Fannie Mae and Freddie Mac Thursday as a senior Treasury official warned that the huge companies shouldn't expect government assistance if they get into financial trouble. In a speech to a real estate group, Treasury Undersecretary Emil Henry said past government bailouts don't mean the government will act again. "Past actions, especially in the case of government bailouts, are not a good predictor of future actions," Henry said in prepared remarks to a real estate roundtable. "And," Henry asked, "do we really want to continue down a path that could lead to irresponsible calls for an unnecessary and preventable GSE bailout?" Fannie's critics in the White House and Congress are ratcheting up pressure on the government-sponsored housing enterprise following a May 23 report by the company's regulator, the Office of Federal Housing Enterprise Oversight. The report said executives manipulated earnings to reap bonuses. The company agreed to pay a $400 million fine for breaking accounting rules. But legislative action has been stalled in the Senate over the issue of limiting Fannie (FNM : Fannie Mae News , chart, profile, more Last: 48.11+0.85+1.80%
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Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: FNM48.11, +0.85, +1.8%) and Freddie Mac's massive holdings of mortgage-backed securities. The White House supports such limits, arguing that a crisis at either company could ripple through financial markets and the U.S. housing market. Signs are emerging this week that the administration may not be willing to wait for congressional legislation to reform Fannie Mae. On Tuesday, Treasury Undersecretary Randal Quarles said his agency will review the process it uses to approve requests by the mortgage companies to issue debt. See full story. Secretary Alphonso Jackson said separately on Tuesday that the Department of Housing and Urban Development would probe whether Fannie Mae and Freddie Mac (FRE : Freddie Mac News , chart, profile, more Last: 57.53-0.05-0.09%
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Get up to 50 free trades at TD AMERITRADE.FRE57.53, -0.05, -0.1%) are improperly holding billions of dollars in assets and liabilities. Robert Schroeder is a reporter for MarketWatch in Washington.
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Franklin Raines and Jamie Gorelick need to be in PRISON for this fiasco!!
Q: What's the difference between Fannie Mae and Enron?
A: The Enron guys are in prison!
If Fan and Fred get into trouble they will be rescued, otherwise the US debt driven economy is kaput. This is just a warning to the GSEs to focus on risk-management and not earnings growth.
If these guy hiccup hard enough it will cause a recession.
No kidding. Jamie Gorelick needs to be in prison for multiple reasons...
"What's the difference between Fannie Mae and Enron?
The US housing market. Shaking the pigmen, that's all. Paulson and Benny have been having a fun week.
"Full of sound and fury; signifying nothing."
They will be legend.
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