NEWSMAX: …mortgage finance behemoths Freddie Mac and Fannie Mae remain government entities and it’s politically problematic for the government to shrink them to a manageable size since they’re making considerable money…
Paulson added that Congress has tied the hands of the Federal Reserve and the Treasury Department in dealing with a future crisis. Bloomberg Businessweek reported that Paulson’s Treasury in 2008 used its exchange stabilization fund to guarantee the assets of money market mutual funds, “a measure that prevented a run on those funds that would have crippled the financial system.” The Treasury would not be permitted to do that today…
“It’s a certainty. As long as we have markets, as long as we have banks, no matter what the regulatory system is, there will be flawed government policies. Those policies will create bubbles. They will manifest themselves in a financial system no matter how it’s structured and how it’s regulated. But the key thing is to have the tools and the political will to act forcefully to limit a crisis,” he explained… (more)
EDITOR: Another article that we heartily recommend be read in full.
