The Treasury Department is reportedly putting the final touches on a plan for propping up beleaguered mortgage giants Fannie Mae and Freddie Mac, according
to a report on The Wall Street Journal's Web site.
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While the Journal story did not have details on the plan, it is said to involve "creative use of Treasury's new authority to make a capital injection into the beleaguered giants," as well as changes to the senior management of both entities. High-level meetings among Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, the CEOs of Fannie Mae and Freddie Mac as well as the companies' new regulator, the Federal Housing Finance Agency, were scheduled for Friday to hammer out the details. While the story said the parties were working out a plan, it did not say when or if the government would implement it.
Meanwhile, in related news on CNBC, Pimco's Bill Gross, who has been urging the Treasury to act, said he couldn't comment about whether he's been asked about buying new debt or preferred stock. - George White
See WSJ story (subscription required)
See story on Fannie & Freddie bailout on TheDeal.com
