Commentary
Financial fears have grown as interest rates have risen and the shadow of recession has lengthened. Most worrying are what might be termed undefined risks. Declines in stock and bond market values, though troubling, are nonetheless quantifiable and well-defined.
In contrast are the kinds of vague risks introduced by Washington’s mortgage giants, the Federal National Mortgage Association (FNMA), Fannie Mae, and the Federal Home Loan Mortgage Corporation (FMCC) Freddie Mac—epicenters of much of the trouble in the 2008-09 financial crisis.
These government-backed enterprises almost went bankrupt during the crisis of 2008-09. They have, in fact, operated under a federal conservatorship since. Back then, the problem was the proportion of questionable credits in the mortgages they acquired from banks and other mortgage lenders. They were subsequently packaged into bonds for sale to the investing public….