Let The Carnies Explain Freddie And Fannie
Filed under: Fannie and Freddie, Fun With Economics
See, it works like this.
Bob SachaWhen the news gets tough, the tough reporter heads to Coney Island. Adam Davidson, on the right in the picture above, turned to a carnie for help in explaining the Fannie Mae and Freddie Mac bailout.
Basically, the game here is that the U.S. buys more from China than China buys from us. China then lends us that money back, so we can buy more Chinese stuff. The way they do that is by buying bonds from Fannie Mae and Freddie Mac. And seriously, that's the whole deal -- the simple version of the whole deal, anyway.
Listen here, and you'll understand this giant game of Kentucky Derby in three minutes. Promise.
12:10 PM ET | 09- 8-2008 | permalink
