Tuesday, September 16, 2008

Fannie, Freddie Takeover Diminishes Financing Options for Banks

"Treasury Secretary Henry Paulson's
decision to seize Fannie Mae and Freddie Mac may choke off the
biggest source of funding for financial companies suffering from
the collapse of the subprime mortgage market. "
"Paulson's ``decision has been devastating to the market,''
said Marilyn Cohen, President of Envision Capital Management in
Los Angeles, which oversees $200 million in fixed-income assets.
``We all thought they would never help exacerbate the banking
crisis and that's exactly what they did.'' "

Bloomberg.com: Exclusive

Gov't interventions don't help. They make it worse and distort the market's natural correction mechanisms.

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