Enough Already, Get Rid Of The Portfolios
The Fed chief is at it again. "Federal Reserve Chairman Alan Greenspan again pushed for limits on the multibillion-dollar mortgage holdings of Fannie Mae and Freddie Mac, saying such restrictions would not hurt the thriving housing market."
"As Fannie and Freddie grow ever larger, their ability 'to quickly correct a misjudgment in their complex hedging strategies becomes more difficult,' Greenspan said. 'We are thus highly dependent on the risk managers at Fannie and Freddie to do everything right.'"
The amazing thing about this is, what is the question about these portfolios? This back and forth about what should be a straight forward issue makes one wonder if something else isn't involved.
"'The assets required for Fannie and Freddie to achieve their mission are but a small fraction of the current level of their assets,' Greenspan said. Thus if Congress were to limit the two companies' holdings so that they can achieve their mission, a substantial liquidation would be required over time, the Fed chief said."