Slatest PM: Freddie and Fannie's Future

Your News Companion by Ben Mathis-Lilley
Aug. 6 2013 5:17 PM

Slatest PM: Obama Talks Freddie and Fannie's Future

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US President Barack Obama speaks on home ownership for the middle class at Desert Vista High School on August 6, 2013 in Phoenix, Arizona

Photo by Mandel Ngan/AFP/Getty Images

Freddie and Fannie's Future: New York Times: "In another sign that the housing market has strengthened, President Obama on Tuesday outlined his long-awaited ideas for overhauling the mortgage finance giants Fannie Mae and Freddie Mac to significantly reduce the government’s risk in any future credit crisis. ... Obama endorsed bipartisan efforts in the Senate to wind down the two companies and end their longtime implicit guarantee of a federal government bailout. That dread prospect, once thought improbable, was realized in the fall 2008 financial crisis; Fannie Mae and Freddie Mac, then bankrupt, were rescued by the government at great cost to taxpayers, who only now are being repaid. The president made clear that he will only sign into law a measure that puts private investors primarily at risk for the two companies, which buy and guarantee many mortgages from banks to provide a continuing stream of money for lenders to provide to additional home buyers. (Read the full text of his speech here).

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Instant Analysis: Matthew Yglesias in Slate: "In the short-term, Obama is more ambitious looking to drive forward a handful of new initiatives to make it easier for people to refinance or for people with past distressed debt but current stable jobs to get loans. If we did everything the president suggests, it would definitely give the economy a short-term boost. But the longer-term vision is timid. From one point of view, it's reassuringly timid. The idea is to resolve some of the most egregious problems with the old system and avoid creating any massive new problems. But from another point of view it's a bit strange to come out of a massive crisis with its origins in the housing sector and the cult of homeownership and come out of it with a reform agenda that very much doubles down on that very same cult."

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Benghazi Charges: Wall Street Journal: "The Justice Department has filed sealed criminal charges against a number of suspects in the attack on the U.S. consulate in Benghazi that killed the U.S. ambassador to Libya and three others, according to people familiar with the matter. The exact nature of the charges wasn't clear, nor was the number of suspects named in the case. But the lack of public charges has led critics of the Obama administration, particularly Republicans in Congress, to challenge the administration's handling not just of the immediate response to the attacks, but of the long-term response as well. Some conservatives have accused the administration of covering up its failures on the night of the Sept. 11, 2012, attack, and beforehand—accusations the administration has strenuously denied."

Gains for Syrian Rebels: Reuters: "Syrian Islamist rebels have killed around 200 people in a three-day offensive in the mountain stronghold of President Bashar al-Assad's Alawite sect and driven hundreds of villagers to seek refuge on the Mediterranean coast, activists said on Tuesday. Since launching the surprise assault at dawn on Sunday, the mainly Islamist rebel brigades led by two al Qaeda-linked groups have captured half a dozen villages on the northern edges of the Alawite mountain range, the activists say."

"Chinese Economic Espionage:" NBC News: "A Chinese energy firm offered big money and access to women to entice an engineer at a U.S. company to launch a cyber raid on his employer, stealing sensitive computer codes and 'thereby cheating (the firm) … out of more than $800 million,' according to newly unsealed court documents and internal messages and emails obtained by NBC News. Federal prosecutors call the alleged cyber theft from American Superconductor (AMSC) in Devens, Mass., one of the most brazen cases yet of Chinese economic espionage in the United States. The techniques the Chinese used to rob the company of three quarters of its revenue, half its workforce, and more than $1 billion in market value were straight out of a 'spy novel,' the firm's CEO said in an interview with NBC News."

Deliberations Begin in Bulger Trial: Associated Press: "After a trial that spanned nearly two months, the jury in the case of reputed mob boss James "Whitey" Bulger has begun deliberations. The jury was read instructions on the law from a federal judge Tuesday morning after hearing closing arguments from prosecutors and defense attorneys Monday. Bulger, 83, is charged in a sweeping racketeering indictment with participating in 19 murders during the 1970s and `80s while he allegedly led Boston's Winter Hill Gang."

Potential Manning Prison Sentenced Reduced: Al-Jazeera: "A US military judge has reduced the potential prison time for soldier Bradley Manning to 90 years from 136 years by ruling that some sentences for leaking secret files to WikiLeaks should be merged. ... In response to defence attorneys' objections that the prosecution was 'overreaching' in seeking separate sentences for all the espionage charges, [Judge Colonel Denise Lind] found that some counts resulted from the same offenses and should be merged to avoid 'an unreasonable multiplication of charges.'"

Childhood Obesity Rates Down: NBC News: "The fight against childhood obesity is beginning to show results, say government researchers. After rising for decades and then stabilizing somewhat in the mid-2000s, the obesity rate among low-income preschoolers declined by small but statistically significant amounts in 19 states and U.S. territories between 2008 and 2011, according to a report from the Centers for Disease Control and Prevention released Tuesday. 'We are excited because we have seen so much work going on in the past several years at the local, state, and national level, and we believe these changes are beginning to make a difference,' co-author Heidi Michels Blanck told NBC News."

New Iranian President Ready for Dialogue: Associated Press: "Iran's new president says his country is ready for 'serious' and swift talks with world powers over the nation's controversial nuclear program. President Hasan Rouhani says he's 'ready to engage in serious and substantial talks without wasting time' and voiced hope that interactions with the West should be based on 'talks, not threats.' Rouhani spoke to reporters Tuesday at his first news conference since taking office. He was inaugurated on Sunday."

A Few More Quick Hits from Slate:

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