Thoughts On “Views Conflict on Fannie Meltdown”
The failure of Fannie is due to the collapse of housing market. Although they may contribute to the surges in housing market prior to the collapse via risky loan, it is unavoidable that Fannie will fail given the free advice fall in housing market. Therefore, the Congress should focus on how to prevent housing market from collapsing. Fannie, the banks and the governement contribute to the downfall of housing market because they did not act to stop the free fall of housing market at the early stage and wait the momentum to build pushing the free fall. Given the free fall in housing market, Fannie will fail regardless what they do. The congress should look at how to intervenue the housing market to prevent it from huge surge and free fall. The control of housing market is as important as the control of interest rate to regulate the economy.
