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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: pater tenebrarum who wrote (5720)	7/25/2000 3:30:02 PM
From: patron_anejo_por_favor	Read Replies (1) of 436258

I can't believe I help pay this guy's salary! www2.marketwatch.com{DD130526-EE3A-4965-9E65-0FD9B626D2CB} Greenspan says Fannie, Freddie financially sound TUESDAY, JULY 25, 2000 1:43:00 PM EST WASHINGTON, July 25 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Tuesday Fannie Mae FNM and Freddie Mac FRE were financially sound, but cautioned that their massive growth, coupled with government subsidies they enjoy, could distort the financial system. "These GSEs are rather well-run institutions," Greenspan assured the House Banking Committee in a question-and-answer session after delivering the final leg of his twice-yearly report to Congress on monetary policy. But Greenspan warned that these so-called government sponsored enterprises were expanding rapidly while enjoying subsidies from the U.S. government. "It's not credible to me that you can have a subsidy without distortions occurring," he cautioned. His comments come as lawmakers on the House Banking Committee weigh legislation to rein in these massive housing finance giants, severing lines of credit made available to them by the Treasury Department. Fannie Mae and Freddie Mac are private companies that operate under a congressional charter to promote home ownership. They buy mortgages originated by banks and other lenders and repackage them into securities, reducing the costs of the loans to home buyers. As GSEs, the two companies are able to raise money in the capital markets far more cheaply than other commercial firms. Greenspan has repeatedly raised concerns about the subsidy these GSEs enjoy.

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