Bernanke: Fannie, Freddie In No Danger

Federal Reserve Chairman Ben Bernanke told Congress Wednesday that troubled mortgage giants Fannie Mae and Freddie Mac are in "no danger of failing."

The Fed chief made his remarks to the House Financial Services Committee, his second day on Capitol Hill where he briefed lawmakers on the problems plaguing the economy.

Bernanke appeared amid a backdrop of fading confidence in the U.S. financial system and in the national economy.

The Fed and the Treasury Department on Sunday came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline.

The two companies hold or guarantee more than $5 trillion in mortgages - almost half of the nation's total- and are major sources of financing for the mortgage market. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans.

The pledges of aid have raised concerns on Capitol Hill and elsewhere about the government's role in intervening to ease such financial troubles and the risk posed to taxpayers.

The two mortgage giants are "adequately capitalized," Bernanke said. However, "weakness of market confidence is having an effect" on the companies, making it difficult for them to raise capital.

The companies' shares have plunged as losses from their mortgage holdings threatened their financial survival.

The government's rescue plan was intended to send a signal to nervous investors worldwide that the government is prepared to take all necessary steps to prevent the credit market troubles that started last year from engulfing financial markets and further weakening the economy and housing markets.

"We will work our way through these financial storms," Bernanke said.

Treasury Secretary Henry Paulson told Congress on Tuesday that he hoped this lifeline won't need to be used. He said the pledge was aimed at boosting eroding investor confidence in the companies.

Bernanke said the "best solution" is to keep Fannie and Freddie "in their current form" as opposed to having the government take them over. It is also vital for Congress to boost regulatory oversight on the two companies. Such powers are contained in a sweeping housing-rescue package. Congressional leaders plan to add to the bill the provisions Paulson is seeking to aid Fannie and Freddie.

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[forthepeopl1]

Concerns about the international breadth of the fallout from Fannie and Freddie''s problems also eased. South Korea''s central bank denied a media report that it had unrealized losses of more than $7 billion in investments in U.S. agency debt including bonds issued by Fannie Mae and Freddie Mac.

Bank of China 3988.HK 601988.SS , meanwhile, may hold roughly $20 billion worth of bonds issued by Fannie and Freddie, according to a research note by analysts at CLSA.

A Bank of China spokesman could not immediately be reached for comment. Because the U.S. government has taken steps to support Fannie and Freddie, CLSA said in its note that it regards the credit risk for the two as near to that of a sovereign credit rating for the government itself.

we are own by china and japan people, get use to it, even the ********** own more of this country than we do.

look as of today we have 300 million people in america, now lets look at these numbers that the govermnet will not give you.

real u.s. american-100 million

so called leigal ima-ants, 100 million

and eilegal not suppose to be here but sucking off america. 100 million.

the goverment said somewhere between 15 and 20 million. right. lier liers.

america is no longer america period..we are slave to the weathly..cant you see that american(real americans )

[wardoglrs]

Yes we have the answer Mr President we have new printer

[slim1h2o]

Bernanke: Fannie, Freddie In No Danger

Liar

[forthepeopl1]

this is the real reason potatohead paulson and ding dong ben and the whitehouse is willing to put americans money to save these banks..make no mistake in what they are doing.

SAN FRANCISCO (MarketWatch) -- Japan''s private-sector financial institutions held slightly more than 10 trillion yen ($95 billion) in debt securities issued by U.S. mortgage lenders such as Fannie Mae and Freddie Mac as of the end of the fiscal year in March, according to a published report.
Both the government and the private sector have positioned the debt of U.S. mortgage firms as their core investment vehicles because of the entities'' high credit ratings and yields higher than those of Treasuries, the business daily Nikkei reported Thursday on its Website.
For now, Japanese financial institutions are not in a rush to unload them on the view that there is little risk of those products plunging in value, thanks to the effective guarantee by the U.S. government, Nikkei said.

they are saveing all there freinds on wallstreet and the world, like china,japan. f- the american is what congress and the whitehouse is saying..

[rushlimpdrug]

"Bernanke: Fannie, Freddie In No Danger"


No, but Bob and Carol and Ted and Alice are.

[forthepeopl1]

AMERICANS ARE YOU READY YET TO MARCH DOWN TO WASHINGTON AND TAKE EVERYONE OUT AND TAR&FEATHER THEM YET..

IT IS OUR RIGHT IN THE CONSTITUTION TO REMOVE THEM IF THEY ARE NOT RESPONDING TO THE MAJORITY OF AMERICANS.. AND THEY HAVEN''T FOR OVER 5 YEARS NOW.

SO ARE WE READY, I KNOW I AM..LOCKED AND LOADED..

[mcv57]

Silence of the stage: Michael Milken Part II.

[tylenol6]

The Federal Reserve is a FRAUD!!!!! Wake up people.....

[mcv57]

How long can this go on ... foreign investors are going to have to say "No." Mortgage Industry is not the Junk Bond ploy (S & L Savings Scandel - 80s), this bottom has no end. Spain and UK has to cut the rope, or its people will suffer.

[Gary Kempf]

The Fed and the Treasury Department on Sunday came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline.

Sure, it is only tax payer money.