Freddie Mac, 8.375% Non-Cumulative Perpetual Preferred Stock (FMCKJ)

[philipmax]

Whatever is suggested, nothing could replace the system as it stands. F&F should never have been made public shareholder companies. By parceling out ownership to the public, congress, in the 1970's, cleverly hid $Billions of national debt away from the window (but still in the bag). Now, the balance sheet of these GSE's have nearly $19 Trillion in outstanding debt. If this Ginny is put back in the bottle, our National Debt goes to $36 Trillion.

And what can be instituted as a substitute?

I can understand a gradual increase in banks' "skin-in-the-game" plan, say 5% to 10%, of issued mortgages, but, at 100%, the system will freeze up just like the 1930s.

Even the proposed Warner-Cocker bill envisions some GSE in the future. So here we are back in the same mess again.

The problem is not F&F, it was management of these GSEs that worked their bonuses on volume rathar than quality. They walked away scott free with $ Billions in bonuses and the shareholders are left hoding the bag.