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Hey! I'm not "obese" after all!

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KansDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 01:41 PM
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Hey! I'm not "obese" after all!
Sen. Dodd: Fannie, Freddie 'Too Big To Fail'
Listen Now <4 min 30 sec> add to playlist

Morning Edition, July 23, 2008 The rescue plan for giant mortgage companies Fannie Mae and Freddie Mac promises credit and possible stock purchases. It might cost the U.S. nothing or it might cost $25 billion. The rescue package has to pass through the Senate Banking Committee, and its chairman, Christopher Dodd (D-CT), is at the center of the debate.

Supporting the companies and their stockholders is important, Dodd says, because "there's a great risk that the people holding the debt are going to dump it. And it isn't just debt being held in this country; it's being held globally ... and if they decided to dump that debt tomorrow, you could have a collapse globally."

Dodd tells Steve Inskeep that the entire architecture of the financial services sector needs to be restructured. In the meantime, though, the Bush administration's plan which would temporarily underwrite Fannie Mae and Freddie Mac with additional loans and prop up the stock price will provide "critical confidence" in the system to help stabilize the markets.

The plan is designed to offer some assurance that the federal government will step in if it has to, that "we're not going to allow this to fail." At this point, the expression "too big to fail" probably applies, Dodd says. "I don't think it applied to Bear Stearns; it applies here."

The problem is not going to be solved by the federal government, but by the private marketplace, Dodd says, and the government now must play a supportive role.

"I'm worried about the dual role. Investor confidence and taxpayer exposure walking that thin line is not an easy path, but ... doing nothing is not an option at this juncture. We have to shore up that confidence."


NPR

ALL RIGHT!!! :woohoo:

There's a very real chance I could go under financially unless I get a second job. But the US Congress won't bail me out so while I could lose a few pounds, I'm not too big to fail!
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Ganja Ninja Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 01:47 PM
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1. Maybe Bush needs to gain some weight. n/t
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