President Obama jets off to Arizona, a state hit hard by the housing crisis, where he will unveil his second-term plan to overhaul the mortgage finance system by winding down the mortgage giants Fannie Mae and Freddie Mac.
The two companies—under government conservatorship since 2008—would be replaced by a system in which a smaller federal backstop would exist for the mortgage market and private firms would bundle the loans into securities, according to a senior White House official.
"We have to end Fannie and Freddie going forward and replace them with a commitment to the notion that private capital must be wiped out before the government pays on any form of catastrophic guarantee or reinsurance," the official told reporters.
Fannie and Freddie are in the process of repaying $187.5 billion they received in taxpayer aid, leading some lawmakers to worry that the window for reforming for mortgage finance is closing fast.
Obama’s blueprint appears to adhere closely to a plan developed in the Senate by Virginia Democrat Mark Warner and Tennessee Republican Bob Corker—which would theoretically preserve the fixed rate 30-year mortgage. It looks like a clear way to target a rival plan from House Republicans that would effectively end the fixed rate 30-year.
The president will deliver his remarks at 3:05 pm EST then he will fly to California to tape the “Tonight Show” with Jay Leno. - Read more at Reuters
LEAVING AFGHANISTAN COULD SAVE $111 BILLION The possibility of withdrawing all U.S. troops from Afghanistan by 2014 is gaining steam among policy circles in Washington. The so-called “zero-option” could save the country at least $111 billion, according to an estimate tabulated by The Fiscal Times’s David Francis based on DOD spending requests, USAID plans, Congressional Budget Office studies and GAO reports. - Read more at The Fiscal Times
FBI: ECON DATA IS VULNERABLE TO LEAKS The Federal Bureau of Investigation found “a number of operational vulnerabilities” enabling leaks from the government’s IT system used to control the release of sensitive, market-moving economic data such as the monthly jobs report, according to a report from the Commerce Department’s inspector general. Read more at The Wall Street Journal
ICYMI: AMAZON’S JEFF BEZOS BUYS THE WASHINGTON POST FOR $250M “The man labeled “the ultimate disrupter” by Fortune magazine last year (not to mention businessperson of the year) is buying a newspaper that has undergone a dramatic disruption of its own in recent years,” The Fiscal Times’ Yuval Rosenberg writes.
Newspapers have been seen as the new toy for billionaires. But Bezos is a unique kind of owner in an industry with a jerry-rigged and creaky business model in the digital age.
“Experimentation requires not just new ideas but the forbearance to see them through – not something that Wall Street regularly offers to publicly held companies. Yet at Amazon, Bezos has put the long-term goals of the company ahead of short-term pressures from shareholders or Wall Street. He has prioritized growth over profits and put customers before Wall Street analysts. It took nine years, including seven as a publicly held company, for Amazon to deliver its first full-year profit to investors.”- Read more at The Fiscal Times
10 THINGS VALUED HIGHER THAN THE WASHINGTON POST’S PRICE TAG
