McCain: Fannie and Freddie Can't Go Under
From CBS News' Ryan Corsaro:
John McCain says he supports some sort of government intervention to keep mortgage firms Fannie Mae and Freddie Mac from going under, but would not elaborate on what the federal role would be in keeping those corporations afloat if investors’ worst fears come true.
"I would support effective action to keep them from going under. And I don't know exactly what that action is now," said McCain aboard his campaign bus outside of Hudson, Wisconsin.
"But there's no doubt that we can't have we these two institutions go under."
Fannie Mae and Freddie Mac make up $5.2 trillion of the $12 trillion debt owed by the mortgage market. With the financial mess the home mortgage market has created for the country's economy, the idea that these two corporate titans could fall has talk of a taxpayer bailout on the lips of traders on Wall Street and lawmakers in Congress.
When companies' share values dropped this week to their lowest value in 17 years, they took the Dow Jones average down with them -- sinking it for a short time below 11,000 points.
"Obviously it has a ripple effect throughout the entire economy. These are the two major backers in the entire American economy, so it's a very, very serious situation," said McCain.
"There's no doubt that there is a real, significant, far-reaching problem that is going to have to very likely require some kind of government assistance."
The question of using taxpayer dollars to bail out financial firms is might be one of contention for voters, but economists fear it is the only option for rescuing Freddie and Fannie. The same was done when the bank of Bear Stearns collapsed back in March – involvement which McCain thought was necessary.
"It's not something because we wanted to do it, it was because of the effect it would have on the overall economy and the country," said McCain.
As to what exactly is the next step for the government to take should be, McCain was hesitant to decide immediately.
"Whether that's helping raising capital, or whether or what that course of action is, we need to examine very carefully…” he said, and offered one way to start.
“Listening to smart people."
Meantime, a spokesman for Barack Obama took the opportunity to criticize McCain in a written statment: "Senator Obama has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families, and that includes an essential role for Fannie Mae and Freddie Mac."
"It took Senator McCain three different tries to figure out a real response to the housing crisis, and his current plan does nothing to help more than two million homeowners who are facing foreclosure," said Obama campaign spokesman Bill Burton.
John McCain says he supports some sort of government intervention to keep mortgage firms Fannie Mae and Freddie Mac from going under, but would not elaborate on what the federal role would be in keeping those corporations afloat if investors’ worst fears come true.
"I would support effective action to keep them from going under. And I don't know exactly what that action is now," said McCain aboard his campaign bus outside of Hudson, Wisconsin.
"But there's no doubt that we can't have we these two institutions go under."
Fannie Mae and Freddie Mac make up $5.2 trillion of the $12 trillion debt owed by the mortgage market. With the financial mess the home mortgage market has created for the country's economy, the idea that these two corporate titans could fall has talk of a taxpayer bailout on the lips of traders on Wall Street and lawmakers in Congress.
When companies' share values dropped this week to their lowest value in 17 years, they took the Dow Jones average down with them -- sinking it for a short time below 11,000 points.
"Obviously it has a ripple effect throughout the entire economy. These are the two major backers in the entire American economy, so it's a very, very serious situation," said McCain.
"There's no doubt that there is a real, significant, far-reaching problem that is going to have to very likely require some kind of government assistance."
The question of using taxpayer dollars to bail out financial firms is might be one of contention for voters, but economists fear it is the only option for rescuing Freddie and Fannie. The same was done when the bank of Bear Stearns collapsed back in March – involvement which McCain thought was necessary.
"It's not something because we wanted to do it, it was because of the effect it would have on the overall economy and the country," said McCain.
As to what exactly is the next step for the government to take should be, McCain was hesitant to decide immediately.
"Whether that's helping raising capital, or whether or what that course of action is, we need to examine very carefully…” he said, and offered one way to start.
“Listening to smart people."
Meantime, a spokesman for Barack Obama took the opportunity to criticize McCain in a written statment: "Senator Obama has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families, and that includes an essential role for Fannie Mae and Freddie Mac."
"It took Senator McCain three different tries to figure out a real response to the housing crisis, and his current plan does nothing to help more than two million homeowners who are facing foreclosure," said Obama campaign spokesman Bill Burton.
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