Monday, September 8, 2008

Blow by Blow Account of Freddie Mac Fannie Mae being Taken Over

In one of the most sweeping government interventions in financial markets in U.S. history, the Government is likely to take over Freddie Mac and Fannie Mae.

The downfall of Fannie and Freddie stems from a series of miscalculations and deferred decisions, both by their executives and government officials, according to company insiders, regulators, auditors and outside analysts. The companies expanded rapidly in recent years, initially playing down the risks posed by a housing bubble. Then, as the housing slump expanded nationwide, they resisted raising enough new capital that might have provided a financial cushion to weather the storm. Lawmakers, paralyzed by partisan infighting, delayed strengthening regulatory oversight of the politically powerful companies.

Read the blow by blow account of the story
Also check what it means (By Deepak Shenoy)
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