A tide of red

Maybe if Fannie Mae and Freddie Mac had been advertised by a half naked SI pinup girl, we might have paid more attention to what they were doing.

Fannie and Freddie, who buy mortgages from banks to free up capital that can make new loans, hold the majority of American mortgages.


But there's nothing sexy about two private lending agencies chartered, but not owned, by the US government. Unless you want to get a mortgage so you can buy a house, thus buying into the great American dream of home ownership.

I didn't pay much attention to the mortgage giants until it became apparent, in the past month or so that they were also enmeshed in the financial crisis-a red tide washing over too much of the financial industry not to be really scary.

Read the article above to see what occurs when regulators decide not to regulate. I assume that it was a decision based on a philosophy that unfettered capitalism will self-regulate. Either that, or the men at the top of the Fed, gnomic Alan Greenspan and scholarly Ben Bernanke took the gathering stormclouds as seriously as I did.

Of course, I wasn't paid to supervise the banking system and regulate the flow of capital through the American economy-they were.