Mortgages: Saving Fannie Mae and Freddie Mac | Newsweek Business

ECONOMY
Citigroup to Buy Wachovia Banking Operations
9/29/2008 12:00:00 AM
PERSONAL FINANCE
Ada vs. Wall Street
Kathy Jones 9/26/2008 12:00:00 AM
According to Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and President Bush, that's pretty much what's happening to several major financial institutions in the current economic crisis. In the last month, the government has brokered three bailouts (Fannie Mae, Freddie Mac, AIG) totaling nearly $400 billion. In Washington and on Wall Street, there are dire warnings that more corporate failures are awaiting us in the months ahead. While a solution is being debated, the front-running fix is Paulson's original $700 billion bailout. Taxpayer funded, it's designed to steady the markets by strengthening ailing companies and easing the current credit crunch.
ROBERT J. SAMUELSON
What is it Really Going to Cost?
Robert J. Samuelson 9/25/2008 12:00:00 AM
Love it or hate it, the true cost of Treasury Secretary Hank Paulson's proposed rescue of the financial system is not the sticker price of $700 billion. Conceivably, the government could make money; with glum assumptions, the losses would probably be less than $250 billion. No one knows the correct answer -- not Paulson, not Federal Reserve Chairman Ben Bernanke nor anyone else -- but here's how to think about the problem.
COVER STORY: BUSINESS
The Captain of the Street
Daniel Gross 9/20/2008 12:00:00 AM
It was a message he never expected to deliver. Henry Paulson—free-market thinker, former CEO of Goldman Sachs and Treasury secretary to a conservative Republican president—was unveiling to the world a massive taxpayer bailout of the American financial system. Afterward, as he headed into yet another weekend of nonstop work with his team, carrying the weight of the troubled markets on his shoulders, the former college-football star was clearly conflicted about what he'd just proposed. "It's very unpleasant for me, but it's a lot more attractive than the alternative," Paulson told NEWSWEEK. "We can spend a lot of time talking about how it happened and how we got here. But we have to get through the night first."
The Great Confidence Game
Robert J. Samuelson 9/20/2008 12:00:00 AM
It's doubtful that Princeton University economist Ben Bernanke and ex-Goldman Sachs CEO Hank Paulson imagined what awaited them when they took charge of the Fed and the Treasury in 2006. Since then, they have put their agencies on a wartime footing, trying to avert the financial equivalent of an army's collapse. As in war, there have been repeated surprises. As in war, the responses have involved much improvisation—for instance, the $85 billion rescue of American International Group (AIG). But last week their hastily built defenses seemed threatened, and so Paulson proposed a radical solution of having the government buy vast amounts of distressed debt to shore up the financial system.
BUSINESS
Big Government to the Rescue
Fareed Zakaria 9/20/2008 12:00:00 AM
It seemed as if the global economy were headed for the kind of crash we haven't seen since 1929. All the elements for a great financial meltdown and economic depression were in place last week—choked-off credit lines, massively leveraged firms, assets gone bad, sinking mortgages, panicked consumers and paralyzed companies. "What is different," says Harvard economic historian Niall Ferguson, "is that then the federal government and the Federal Reserve did all the wrong things. Now they're mostly doing the right things."