Game Over: How Repugs Bankrupted Fannie and Freddie
by Anonymous
I don't think that the general public realizes how the impending collapse of Fannie and Freddie is a game-changer. Bear Stearns, Enron, IndyMac, those are all small potatoes in comparison to the massive size of the GSE's.
The inevitable failure of these institutions is so epic that when the epitaph of the American Empire is composed it will be Fannie and Freddie that are written large.
However, some people are shouting warnings now.
"If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to questions yesterday. "If it is not the end of the world, it is the end of the current international financial system."
"The seriousness of such failures could be beyond the stretch of people's imagination," said Yu, a professor at the Institute of World Economics & Politics at the Chinese Academy of Social Sciences in Beijing.
Believe it or not, this warning is not the one that scares me. It is the warning from Warren Buffett that is truly frightening.