The $5 trillion dollar problem

Friday was a terrifying warning as stock prices for Freddie Mac and Fannie Mae plunged up to 50% before staging a recovery based on words of support out of Washington. That may have kept the wolves at bay for a day but this is going to be a big worry in the coming days. Words of concern or words of support may impact timing, but ultimately they don't impact the market fundamentals which are bad. Freddie Mac and Fannie Mae have been a topic of concern for quite a long time.

We had Depression era banking laws in place for a reason and just because Phil Gramm wanted to gain favor with UBS for a job, the rest of Congress shouldn't have gone along with his failed logic. Modernizing bank regulations is a start, but we do not need nor should we allow financial institutions to become too big to fail. That's where we are today and we don't have a spare few trillion sitting around to bail everybody out.