As wee discussed Saturday, the details of the Fan-Fred bailout will be announced early Sunday at 11 am.
In my opinion, this is very consistent with the Fed focus on asset prices. I believe that focus is an error the Fed has consistently made since Greenspan took rates down to 1% to bailout the tech wreck of 2000-03. When the US announces a major piece of government legislation on a Sunday afternoon in order to goose Asian markets before they open, you have to question just what the priorities of the nation’s leaders are.
The U.S. Treasury is expected to announce early Sunday afternoon details of a plan under which regulators will effectively take temporary control over government-sponsored mortgage investors Fannie Mae and Freddie Mac.
The Treasury won’t necessarily make a large injection of capital immediately into the ailing companies, which provide the bulk of funding for U.S. home mortgages. But people familiar with the plan said the Treasury will stand ready to provide capital as needed, depending how quickly losses deplete the companies’ meager capital holdings.
More later . . .
Treasury to Outline Fan-Fred Plan
By DEBORAH SOLOMON, JAMES R. HAGERTY and DAMIAN PALETTA
September 7, 2008 12:42 a.m.
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