Old Turk

A First Look Inside the Fannie / Freddie Bailout Plan

Kudos for the govt plan, as hard as it is for a free marketer to swallow. It covers as many of the open bases as could be covered. Bondholders intact, so no foreign govt runs. Preferred holders scalped but banks can apply for relief regarding capitalization, so FDIC won't look all that much weaker. Common holders OTL, but that's life. Pretty pathetic, but beats standing on the street corner with a tin cup. And 10% return for the taxpayer is about commensurate with risk. Now then, mighty government, let's see how the 800bn swallow in bad MBSs and CDOs generally goes in 2009.