Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Palau who wrote (25926)	4/8/2008 12:31:48 AM
From: Peter Dierks	Read Replies (1) \| Respond to of 71588

Fannie Gets a Pass April 7, 2008; Page A12 There are plenty of bad ideas in the housing "rescue" bill currently flying through Congress (see here). But Senator Mel Martinez (R., Fla.) is offering an opportunity for at least partial redemption. This week he wants the Senate to vote on his amendment to strengthen regulation of Fannie Mae and Freddie Mac as part of the housing bailout. Congress has debated reform of the mortgage giants since long before the housing bubble popped. But through good times and bad, and even during multibillion-dollar accounting scandals at Fan and Fred, Capitol Hill has so far refused to bring any stronger oversight to these "government-sponsored enterprises." Senator Martinez's amendment would take the reform that the House passed last year and attach it to the current housing bill. The House bill has been debated and vetted ad nauseam, so it's a known quantity. As reforms go, it's far from perfect and would require a very tough-minded regulator to stand up to the companies and their political patrons. But it would at least give the regulator more tools to manage the systemic risk posed by their size and the implicit taxpayer guarantee of their liabilities. Mr. Martinez has signed up Tom Carper (D., Del.) as a co-sponsor and says that even New York liberal Chuck Schumer, Fannie's biggest cheerleader, is at least "open" to the idea. That leaves Democrat Chris Dodd and Republican Richard Shelby, the two big guns on the Senate Banking Committee, as key players in whether the amendment goes forward. We're told they feel put out that this could pass without going through their committee, but so far the Banking Committee has a whole lot of nothing to show for its efforts to produce a reform bill. "Systemic risk" was the word of the day last week in Washington as the solons grilled Federal Reserve Chairman Ben Bernanke. But the package the Senate will debate this week fails to address the systemic-risk elephant in the room. If the Senate wants to avert the next catastrophe, instead of throwing money at the last one, it will take up Mr. Martinez's proposal.