More on the Mortgage Hurricane

The last week of September promises to be a critical week in American finance and American politics.

The financial blog Seeking Alpha reports the big mortgage GSE's, Fannie Mae and Freddie Mac will need to refinance over $200 billion in bonds before September 30. http://seekingalpha.com/article/91808-fannie-freddie-and-the-debt-rollover-problem

The ability of these firms to do so in being impaired by higher and higher interest rates being charged by buyers of their debt.

The equity markets continue to be macabre for these firms, as Fannie and Freddie both were bloodied on the NYSE http://biz.yahoo.com/ap/080820/mortgage_giants_crisis.html

It seems quite likely the Bush Treasury Department will need to step in and fill this funding vacuum with a taxpayer backed bailout. At that point, we will see who is on the taxpayers' side and who is not.

I think OpenSecrets puts it best. http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html Fannie Mae and Freddie Mac invest in Democrats.

And the top recipient.....surprise...is Chris Dodd!  

Fannie and Freddie may be "too big to fail", but how they are propped up and what happens to their hapless management teams is crucially important.

Dodd and Co. will try and save the slush funds for ACORN in the already failed 2008 mortgage bailout bill http://online.wsj.com/article/SB121547279817433919.html?mod=opinion_main_review_and_outlooks and will resist the cashiering of GSE executives.  

The Democrat modus operardi will be to ignore reality (Fannie  Mae is in a "sound situation" http://journalinquirer.com/articles/2008/07/16/connecticut/doc487b4ff58727c620830661.txt) as long as possible and then try and blame Bush for a debacle they did nothing to prevent.

In September , John McCain will have the ability to stand against this and make clear to the American people the age of corporate welfare is over. 

Neither he, our party or our taxpayers will be well served by letting this opportunity pass.