by Matthew Richardson
Recently, the government sponsored enterprises, Fannie Mae and Freddie Mac, announced new losses, bringing the total tally to $126 billion. It barely registered as news. There is a chance, not a great chance, but a chance nonetheless, that the support thrown at the banks is not all money down the drain. But the chances are slim to none that either Fannie or Freddie will be able to pay back the funds. It is highly likely that taxpayers will lose well over $2000 billion and it may well pass $300 billion. When the history of the crisis is all written, these institutions will turn out to be the most costly of the financial sector, and this sector includes A.I.G., Citigroup and Bank of America/Merrill Lynch.
Why are the GSEs so costly? Why aren't people up in arms? In a recent op-ed in the NY Post, I offer some possibilities. See the following link:
You can also view my interview on FOX Business Network on the same subject.