As much as it pains me to say so, I don't think we had any choice. I had heard that these two outfits held 3/4 of the mortgages in the country. The overwelming majority of the mortgages that they hold are in good shape and regular payments are being paid on them. Only a small percentage are in bad shape or foreclosure.
True, but that small percentage would have destabilized Fannie and Freddy, and AIG's collapse would have had catastrophic repercussions, as they are the major insurer of the loans. The real fix is to repeal the Community Reinvestment Act so that banks aren't forced to make loans to bad credit risks and enforce the fraud statutes against the executives who hid billions of dollars in losses from bad loans so that they would qualify for bonuses. Franklin Raines needs to do some serious jail time. He's more of a crook than anyone at Enron.