The Plan to Privatize Fannie Mae and Freddie Mac


You're invited to travel the world and discover what it means to live. The intercontinental life with more than two hundred properties worldwide intercontinental hotels and resorts welcomes you to who iconic properties in global destinations including new york london and shanghai discover more about the cities and the tails inspire with stories of the intercontinental continental life a collection of stories that were excited your curiosity and offer new perspectives on the world here more at intercontinental dot com forward slash life zimbabwe's president robert mugabe has died. It's a bit of a complicated legacy and the trump administration looks to privatize fannie mae and freddie mac mission believes pretty strongly that the government should not play a central role in housing plus. It's jobs day. We'll have a preview of what to expect from august's report. This is what's news from the wall street journal on kim get us in. Let's get started now before we take a look at why the trump administration wants to put mortgage lenders fannie mae and freddie mac back in private hands. Here's what you missed. The former president of zimbabwe robert mugabe has died at the age of ninety five. He was is a schoolteacher turned guerrilla fighter who helped to topple white rule in zimbabwe. Only to then lead the country to the brink of economic ruin his successor president emerson managua said in a message on twitter quote commander mugabe was an icon of liberation a pan africanist who dedicated his life to the emancipation and empowerment norman of his people his contribution to the history of our nation will never be forgotten our deputy africa bureau chief gabrielle steinhaeuser is in capetown so gabrielle. Tell me a bit more about how mr mugabe ended up in power so mugabe came to power in nineteen eighty initially as prime minister of zimbabwe <hes> having sort of liberated his country from the british and and and also white minority government that followed and in his his first few years he really kept warm relations with his predecessor they would regularly have t- you know and he i think he was was honored by the british and he will succeed as this and of enlightenment need a he was a schoolteacher. You know he was educated. He we build a very strong education system zimbabwe but you right that the way he'll be remembered is a bit more complicated. I think it's a bit of a complicated legacy. I would say for most imbaba winds. They will remember him for the brutality and economic hardship of his final decades in power where the economy really spiraled and off any kind of opposition was brutally repressed but then you know you have other leaders in africa who really especially here in south africa really remember him for the support he gave them in their old liberation struggle so we had a very sort of hard shelled message from the ruling party the african national congress in south africa so the lauding him for his contribution to bringing the an and to apartheid and how is zimbabwe doing now. It's actually a really kind of sad adds to that because after he finally resigned resigned than i was in harare you know tens of thousands of people just storming the streets in celebration and there was so much optimism not only among zimbabweans but also among western governments who were ready and companies who are keen to engage in an invest. I think what we've seen over the last nearly two in years. There's a lot of that optimism plate fade away so it's hard to kind of look at mugabe's staff this this point to to a story of decline because it seems like the decline unfortunately continues are full obituary up on our website and state eight attorneys general are formerly launching antitrust probes into facebook and google starting next week. That's according to people familiar with the investigations. The investigation into alphabets google will be led by texas attorney general ken paxton a republican and it focuses on the impact of google on digital advertising markets the facebook probe will we led by new york's attorney general latisha james democrat in a statement miss james said that she has quote concerns over the control of personal data by large tech companies and will a hold them accountable for anti-competitive practices that endanger privacy and consumer data and quote facebook declined to comment and google said it was cooperating with the inquiries quarries do now our main story this morning. The trump administration administration said it would support returning the mortgage lenders fannie mae and freddie mac to private hands. It's a major reversal from what leaders of both parties have been promising that was to abolish polish both the companies. Here's a stat for you fannie and freddie guarantee roughly half of the u._s. Mortgage market charlie turner has been finding out more about the shift aft from andrew ackerman andrew. What is the government's rationale for the process to eventually return fannie mae and freddie mac to private ownership is really two fold. The the first is that when the government put fannie freddie into conservative ship eleven years ago it was supposed to be temporary and they really are serious about finally ending that a lot of people have tried. Everyone's failed to end the conservative. They wanna give it another go. The second reason i guesses more ideological where the administration believes pretty strongly that the government should not play a central role in housing which touches on a huge portion of the economy about fifteen percent of the economy so from what i understand the proposal recommends that federal regulators developed plans to privatize both both mortgage finance giants a plan to develop a plan yeah that seems to be the direction we're headed in is they're not taking positions on specific issues issues like what to do with the government stakes <hes> in these companies but they are sort of saying hey f._h._a. Which regulates fannie and freddie you you guys should develop <hes> capitalization structure. They need capital to be able to stand on their own eventually. They're also saying hey why don't you look at what types of activities maybe we should consider curtailing fannie and freddie i a lot of loans conservative basically questioned why they buy some of along that they'd buy including loans for second homes or investment properties and also cash out refinancing basically critics questioned the utility of the government government effectively subsidizing those loans. They say the private market can do that. Isn't it possible that homebuyers cost might rise under such a proposal. It's certainly possible possible. I i think the administration is stressing that they're not gonna do anything that will affect individuals access to loans or make it more expensive assistive if you talk to housing experts though they said that the administration's policy goals are contradictory they want to shrink the government's role in housing but they wanna do it in a way that it doesn't increase costs and they say that that's going to be really hard if not impossible to do in a meaningful way and that's because any effort to cut back on the loans at fannie and freddie come by means that if you go to a lender your learner probably bought by private investors not by fannie and freddie and they're probably going to the demand higher rates of return than what fannie and freddie demand and that basically has a cascading effect where it will necessarily increase costs and i think i think that's one of the reasons why this is such a difficult issue. That hasn't been tackled. Nobody wants to mess with the housing market especially going into an election year. Nobody wants to be the one who makes thirty year your fixed rate mortgages unduly costly for for lots of buyers you can find our full coverage of fannie and freddie and what the reversal means up on w._s. Gye i dot com. You're invited to travel the world and discover what it means to live the intercontinental life with more than two hundred properties worldwide wide intercontinental hotels and resorts welcomes you to iconic properties in global destinations including new york london and shanghai discover more about these cities cities and the tails inspire with stories of the intercontinental life a collection of stories that will excite your curiosity and offer new perspectives on the world here more or at intercontinental dot com forward slash life on two markets while china bit about the outlook for august shop support later but another third thing keeping investors busy today will be a speech by fed chair jerome powell in switzerland. His appearance in zurich is the last opportunity for mr powell to set expectations for the fed's fed's policy meeting later this month before their customary pre-meeting quiet period begins caitlyn ostrov has more on what investors will be paying attention to so investors are going interesting into every word that powell says it's the last time he speaking before the september meeting and so it's their last chance to really figure out what the federal do come september markets are currently pricing in a twenty five basis point cut and so they will be looking for that to be met in anything that falls short of that will probably not be met with the best first reaction <hes> markets are also pricing in three more cuts over the next eighteen months and so they'll be looking for indication that the fed is also planning on taking action further down the road and not just immediately and here's what else were paying attention to today <music> like i mentioned earlier. It's jobs diane at eight thirty a. m. eastern time. We'll get a snapshot of what happened in the jobs market in august. Here's sara cheney on what to expect. It will be really important to keep a close eye on job growth. The payrolls estimate is one of the most comprehensive reprehensible and timely numbers on how the economy is performing and it will take on added importance <hes> in august because as we saw sharp economic slowdowns overseas faltering manufacturing and market volatility in the first seven months of twenty nineteen gene employers added an average one hundred sixty five thousand jobs a month which is a slowdown from two hundred twenty three thousand in in two thousand eighteen but it's still a solid pace watch for a solid number in august but are one. That probably won't match twenty eighteen. We'll have an update on the numbers once they're out and our afternoon podcast and the trump administration is pressing regulators to accelerate the rollout of new tailpipe commission rules. Why does this matter well. It's an effort by the administration to strike back at california. The state cut a side deal with several carmakers to set standards is that are tougher than those proposed by the administration now. According to people familiar with the proposal officials might move within the next few days to curb california's influence on the car industry for their part carmaker say they're worried that a confrontation between the administration and the nation's most populous state could result in a long legal battle that would force forced manufacturers to meet to different standards on tailpipe emissions to sell cars in the country. Finally let's go back in time. It was the summer of nineteen he ninety eight and net flicks is co founders. Marc randolph and reed hastings had big dreams for the future of how will all consume content the problem. They weren't making very much money mm-hmm but then a call came from seattle and maybe you can guess where this is going but in an exclusive excerpt from mr randolph's book it's called that will never work the birth of net flicks and the amazing life of an idea he reveals that netflix briefly thought about selling itself to amazon nearly two decades ago. It's a pretty amazing what f jeff but amazon netflix prime doesn't really have the same ring does it instead netflix decided to go it alone but it got rid of its d._v._d. Sales business you can read the the full thing up on our website. That's what's news from the wall street journal. Thanks for listening and have a great weekend.

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