Although Bush may have sounded "presidential" to low-information voters, his "explanations" didn't convince me one bit, they were not sound logically.
Points A and B didn't lead to Point C. Fannie and Freddie already own about 750 Billion in U.S. Mortgage debt - about 3/4 of the outstanding total. Why not have the two companies buy up the remaining 400 Billion in debt and become the de facto loan servicer of all U.S. mortgages - put a moratorium on foreclosures and re-structure all the loans into fixed rate loans based on existing home prices? This would immediately prop up the housing market from the bottom up.
In conjunction with that move, take the individual mortgage number assigned to each home mortgage as it was assigned to a mortgage backed security and put it in a database - each holder of an MBS, along with level two CDO's and level three CDS's could then identify which mortgages comprise the "assets" of their "security." Then all of these completely unregulated financial products would have a true worth attached to them.
I'll tell you why the powers that be won't go for this simple plan - because there are something like 50 Trillion dollars worth of these types of securities on the market. That's right, all of the home equity in the U.S. has been leveraged to 50 times it's actual current value. So how exactly does a cash infusion of 700 Billion improve this situation? Answer: it doesn't. The folks owning these exotic securities are inevitably going to have to take write-downs on the value of these as they "mark them to market" value. The only question is how much the wealthy Wall St. elite can suck from the government tit before that happens. I suspect Hank's 700 Billion is just a start.
Fuck them - we were supposed to trust Bush on Iraq, Katrina, etc. And now we'll trust him on this? I don't frickin' think so.