Saturday, May 7, 2011

Stop Digging

When you find yourself in a hole, the first thing to do is stop digging.

Fannie Mae is asking the taxpayers (that would be us) to fork-over another $8.7 Billion (that's with a "B").  They just reported another $8.7 Billion loss from just the first three months of 2011.  Home prices continue to fall, and those defaults are adding up for the mortgage backing Goliath.

There are lots of fingers to point on who and what caused this debacle.  In any case, it's a sunk cost at this point.  The true question is, "where do we go from here?"

I don't think throwing more money at a failing institution is the right answer.  Just doesn't seem very...what's the word?  Ah, yes, capitalistic...or "free market" for all my economic friends.

As the AP reported, the company is nearing a $100 Billion bail-out...the largest ever.

The Administration started the "process" to dissolve Fannie Mae and Freddie Mac in February.  They want to get out of the government backed mortgage industry.  Gee, government getting out of the way of the free market?  Now there's a concept.

But I'm not holding my breath.  When's the last time government gave up control of something, especially something involving money?

I'm waiting for your answer....

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