Tim Geithner Wants You Believe That He's Going to Fundamentally Change Fannie and Freddie
Oh Timmy Timmy, why ya buggin? Surely it has nothing to do with the fact that GSE CEOs are pulling in $6 million a year, does it?
Tim Geithner forgets sometimes that we are paying attention.
Treasury Secretary Timothy F. Geithner on Tuesday told a congressional panel considering the future of Fannie Mae and Freddie Mac that the Obama administration would seek to keep in place aspects of the housing-finance system that have worked well during the past few decades as it overhauls the parts that did not.
In response to questioning, Geithner said mortgage-finance giants Fannie and Freddie were at the center of a system that "was in many ways the envy of the world" for many decades. "It's important as we think about the future to make sure we retain what was good in this system," he said.
But the Treasury secretary said that the old system would not be re-created and that Fannie and Freddie's status as shareholder-owned companies with the implicit backing of taxpayers would end. "We're going to have to do fundamental change," Geithner said, adding that the government would make clear what it stands behind and what it doesn't.
How does this impact Geithner's decision to offer essentially unlimited funding to keep Fannie and Freddie afloat? Geithner is going to have to take a stand on GSEs and if his past performance is any indication, he'll stand on the side of the line that leaves the taxpayer's ass rawest and sorest. That's my guess.