Did Fannie’s 2005 Shrinkage Prove White House View That GSE Portfolios Don’t Serve Mission?
The White House 2006 Economic Report of the President released this week takes the debate over reform of the government-sponsored enterprises a step further by suggesting recent events prove the administration’s view. With support from the Federal Reserve and some private-sector analysts, the Bush administration has argued that Fannie’s and Freddie’s massive retained investment portfolios create a lot of potential risk but do nothing to further the GSE mission to support the secondary market.…