WASHINGTON - July 10, 2008 -
Mortgage lenders Fannie Mae and Freddie Mac are "insolvent" and may
need a U.S. government bailout, former St. Louis Federal Reserve President
William Poole was quoted as saying in an interview with Bloomberg.
"Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," said Poole during the Wednesday interview.
Poole said that chances are increasing that the government may need to bail out the two mortgage companies.
Shares of the two companies have taken a beating recently on worries about whether they can withstand more losses and support housing as well as concerns that they may need to raise massive amounts of new capital.
Freddie Mac shares tumbled 23.8 percent to $10.26 on the New York Stock Exchange on Wednesday, while Fannie Mae shares sank 13.1 percent to $15.31.
Ed. Note: All government bailouts are taxpayer funded. In other words, the government legally authorizes itself to take your money and give it to mega-corporations! When will you have had enough of this theft, slavery and injustice?