"Blank checks almost always get filled in and cashed," said Stuart Hoffman of PNC Financial Services Group.
Chances are better than even that government money will be used to prop up Fannie Mae and Freddie Mac, according to economists in the latest Wall Street Journal forecasting survey, and a sizeable minority said the institutions should be nationalized.
When Treasury Secretary Henry Paulson went to Congress last month to defend his plan to extend credit to Fannie and Freddie or purchase equity in the government-sponsored enterprises, if necessary, he made it clear that the proposal is a "backup facility, [that] hopefully would never be used." However, sharp losses at the two companies last week and continued concerns about the U.S. credit market have increased the chance that government funds would be needed. On average, the 53 economists polled in the survey put the probability at 59% that the Treasury Department will have to step in to bail out Fannie or Freddie.
Economists are deeply divided on whether or not we are in a recession, according to the latest WSJ forecasting survey. WSJ's Phil Izzo and Kelsey Hubbard discuss the survey, where many economists agreed we will see a further slowdown
Odds of Fannie and Freddie Bailout Better-Than-Even, Economists Say
WSJ, August 14, 2008
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The people who need a bailout right now are those long of silver. Think Ben will write them a check or do direct deposit?
Posted by: Steve Barry | Aug 15, 2008 12:08:42 AM
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