Markham Lee_

A Look at Freddie's Trailing Six Quarter Performance

To be sure I'm not a big fan of the GSEs existence in general, as I don't think the government should be in the business of providing a quasi-subsidy for housing.

BUT

I'm not going to win that war.

So I'd like to propose that the GSEs be broken up into smaller companies that will be split up into new companies if they grow larger than a certain size. The idea is not to manage the GSEs from the perspective of pump as much liquidity into the mortgage markets as possible, but from the perspective of minimize the risk such an organization poses to the economy.

The idea that the Government has created two companies that have the potential to dump massive liabilities on the tax payer, wreak havoc on the economy and on the global credit markets is just criminal. Steps need to be taken ASAP to reign in the GSEs, curtail their investments and break them up in order to spread the risk around.

-M