COMMENTS: Meet Freddie and Fannie

Freddie Mac and Fannie Mae are in trouble. Those strange inside-the-Beltway institutions--so-called Government Sponsored Entities--that are neither financial firms nor government agencies guarantee more than $5tr in debt. That debt is secured by 42% of the nation's home mortgages. As real estate prices plummet those mortgages grow less reliable. If FHLMC and FNMA become unsound the federal government will have to pony up billions, or even take them over, in order to keep the housing market from crashing. Thus an arcane financial bureaucracy became the Story of the Day, the lead item on all three network newscasts.

NBC, alone, had covered intimations of the looming problems at Freddie and Fannie Thursday, courtesy of David Faber of CNBC, its sibling financial news cable channel. Now NBC turned again to CNBC, with Trish Regan covering their potential need for a federal bailout and Jim Cramer, host of Mad Money providing analysis. Regan pointed out that half of the entire National Debt is held by these two institutions, whose stock prices are now more than 80% below their onetime highs. Cramer added that IndyMac Bank in California "an aggressive, some would say reckless lender" has folded, requiring takeover by the Federal Deposit Insurance Corporation.

Financial worries were so acute that lame duck President George Bush attracted rare attention on the nightly newscasts. CBS' White House correspondent Jim Axelrod covered his crisis meeting with Treasury Secretary Henry Paulson: "vague on solutions," was Axelrod's assessment. CBS had Anthony Mason spell out the financial intricacy of these "funny names." He described their role as providing "the grease that keeps the housing market moving." Betsy Stark did explainer duties on ABC after anchor Charles Gibson called Freddie and Fannie "the names of an aunt and uncle you have never met."


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