Socialized mortgages

So, the government has taken over Fannie and Freddie.  Not much surprise there.

My thoughts:

• This is better than nothing.  I would have preferred an outright breakup and privatisation--which may still happen, someday down the road.  But the government providing an implicit guarantee meant that Uncle Sam was taking on the risk without taking on the benefits.
• As usual, the regulators are locking the barn after the horse has been stolen.  This should have happened months ago.
• There wasn't that much new information in the market to trigger the takeover--it's not as if capital requirements have plummeted.  Rather, the existing regulatory requirements were found to provide inadequate capital in a broadly sinking market.  We knew a long time ago that the current real estate market had made traditional capital adequacy requirements absurdly inadequate.
• Fannie and Freddie are the reason that the US has 30 year fixed mortgages; they can borrow capital at government rates.  The ability to borrow money on these terms is probably not worth the distortion in the markets, and the constant regulatory tsuris of managing these behemoths.  Better to borrow money on variable rates, like the rest of the world, than to have the mortgage market dominated by either the government, or two quasi-private companies.
• The claim that this represents the failure of markets is more than a tad silly.  Fannie and Freddie weren't truly private companies, didn't act like truly private companies, and wouldn't have been allowed to so dominate the market if they had been.  This is yet another failure of a government program.