Susan Wharton Gates is the first to offer us an insider look at Freddie Mac and the near-crash of the world economy. Unfortunately, the recovery is built on fault lines. Will we protect ourselves?
Gates is a former 19-year Freddie Mac employee and vice president of public policy. With clarity and candor, she reveals the competing economic and political forces that led to massive losses for shareholders, investors, homeowners, and taxpayers.
More than a forensic, Days of Slaughter calls the business world and consumers alike to a higher standard of ethics in spending and lending, if we are to avoid another economic crisis - one which, this time, will be utterly devastating.
In September 2008, beset by mounting losses on high-risk mortgages and mortgage securities, the Federal Home Loan Mortgage Corporation teetered on the brink of insolvency. Foreclosures were soon to strip home owners of property and security.
Fearing that confidence in the housing market would collapse completely if Freddie Mac and its competitor Fannie Mae failed, the U.S. Government made the difficult decision to place the two firms into conservatorship, taking control away from shareholders. Although the taxpayer commitment of hundreds of billions was meant to stabilize the housing finance system, Freddie’s fall at the start of the financial crisis set off shockwaves around the world.
With a keen eye to the policy landscape, Gates relates the fateful decisions that led to Freddie Mac’s downfall and desperate rescue. She also examines today’s worrisome headlines about potential future bailouts, the uneven housing recovery, and stymied congressional reform efforts. Throughout the book, Gates argues convincingly that policymakers will be unable to safely reform the massive housing finance system that currently rests squarely on taxpayer shoulders without addressing deeper issues of ideology, moral hazard, and interest group politics.
Days of Slaughter: Inside the Fall of Freddie Mac and Why It Could Happen Again can help homeowners understand how to protect themselves from future financial upheavals in the lending world. And it calls for ethical reforms that can save us all from global economic crisis - if we have the courage to act now.
Listen to Susan's interview with John Fugelsang on Sirius XM radio