Related Articles: Saving Fannie & Freddie
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PERSONAL FINANCE
Ada vs. Wall Street
9/26/2008 12:00:00 AMAccording 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.
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ROBERT J. SAMUELSON
What is it Really Going to Cost?
9/25/2008 12:00:00 AMLove 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.
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COVER STORY: BUSINESS
The Captain of the Street
9/20/2008 12:00:00 AMIt 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."
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WALL STREET
What Will the Bailout Cost?
9/19/2008 12:00:00 AMTreasury Secretary Henry Paulson will spend the weekend finalizing a plan to rescue the ailing banking system by buying up toxic assets, at a potential cost of "hundreds of billions of dollars."
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What, No Lehman Aid?
9/12/2008 12:00:00 AMWall Street is consumed with the subject of bailouts. As analysts chewed over the implications of the government's decision to assume the debt of ailing mortgage giants Fannie Mae and Freddie Mac, traders (and their real-estate brokers) wondered whether erstwhile titans Lehman Brothers and Washington Mutual would be next in line for government assistance. Meanwhile, lobbyists for the big three automakers were refining their pitches for $25 billion in loan guarantees. It is sure to be another long weekend for Treasury Secretary Henry Paulson.
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Time Out
9/10/2008 12:00:00 AMThe U.S. Treasury Department's takeover of Fannie Mae and Freddie Mac is one of those mega events that simultaneously calls for instant analysis (and lots of it) and time out for a deep breath or two. The move is so vast in its implications and says so much about how the world has changed, it's about as hard to take in as a view of the grand canyon. In the spirit of deep breathing, here are four thoughts to keep in mind about the buyout:
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