2008-07-23bloomberg.com

Fannie Mae and Freddie Mac rose after U.S. lawmakers reached a deal on legislation that authorizes Treasury Secretary Henry Paulson to bail out the mortgage-finance providers while placing few restrictions on the companies.

...

Congress isn't requiring the companies to give up warrants or make other payments in return for the federal backing. The bill doesn't require the companies to cut or eliminate dividends if they tap the federal aid. It also doesn't give the U.S. Treasury a senior repayment status if it buys the companies' preferred shares.

In addition, the companies were able to substantially weaken a provision that gives the new regulator authority to approve new lines of business or products, said Joshua Rosner, an analyst with independent research firm Graham Fisher & Co. in New York.

Nothing like the smell of socialized losses and privatized gains with your morning coffee.

This also from the same article, on the stalled $300B 10%-loss limit for banks:

The Bush administration withdrew its veto threat on a measure to provide $3.9 billion to communities for the purchase of foreclosed properties.

``We believe this is not the time for a prolonged veto fight,'' White House Press Secretary Dana Perino said in a conference call with reporters.

My question is: where are they going to get the money for all of this?


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