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News ::
EDITORIAL: THAT SINKING FEELING (english)
17 Jun 2003
EDITORIAL: THAT SINKING FEELING
-------------------------
Via Workers World News Service
Reprinted from the June 19, 2003
issue of Workers World newspaper
-------------------------

EDITORIAL: THAT SINKING FEELING

Freddie Mac is not a double-cheeseburger served under the golden arches of a fast-food palace. There is cooking involved, but it's the books that are being cooked.

Freddie Mac is the nickname for the Federal Home Loan Mortgage Corp.
Together with Fannie Mae--the Federal National Mortgage Association--
these congressionally chartered private companies were established to
ensure a stable mortgage market.

Things aren't so stable.

A management shake-up on June 9 was a serious tremor that could, at the very least, destabilize the housing market, possibly leading to its collapse.

Freddie Mac doles out the federal loans for housing. Now it turns out
management might be eligible for a Pulitzer Prize for fiction for making their books look like things are better than they are. The reshuffling at the top says it's serious.

Who audited the books? Corporate expert Arthur Andersen--the company
accused of shredding the evidence of Enron's cover-up of its real
economic picture.

Freddie and Fannie buy home mortgages made by banks, savings and loans
and other lenders. They enjoy an "implied guarantee" that the government would bail them out in a financial crisis.

Together, these two giants own or have guaranteed about 42 percent of
the $7-trillion home mortgage market. Freddie Mac owns or insures $1.29 trillion worth of real estate.

At the end of last year, the total assets of both private companies were estimated at nearly $1,600 billion--roughly 44 percent more than the assets of the biggest U.S. bank, Citigroup.

Could the Treasury keep this big a financial yacht afloat?

While the media eye is trained on Martha Stewart's mug shot, she's just a little fish, accused of some insider trading.

The big corporate executives, like Enron's former CEO Kenneth Lay, are
still wearing pin stripes, not prison stripes, after grand theft of so
many workers' life savings. Lay--known to the Bush clan as "Kenny Boy"-- swam with the big fish in the military-industrial complex, the Oval Office and Congress.

The Freddie Mac purge is not just about corruption that led to covering up the economic reality--it's a big tipoff about that reality. The luxury liner of the U.S. capitalist economy has not turned around. It's continuing to take on water and sink.

- END -

(Copyright Workers World Service: Everyone is permitted to copy and
distribute verbatim copies of this document, but changing it is not
allowed. For more information contact Workers World, 55 W. 17 St., NY,
NY 10011; via e-mail: ww (at) wwpublish.com. Subscribe wwnews-
on (at) wwpublish.com. Unsubscribe wwnews-off (at) wwpublish.com. Support the
voice of resistance http://www.workers.org/orders/donate.php)
See also:
www.workers.org
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