Risky Business

Oh boy.

The government on Wednesday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to inject an additional $200 billion of financing for home loans.

…It was the third step the government has taken in recent weeks to allow Washington-based Fannie and McLean, Va.-based Freddie to shoulder larger burdens in the mortgage market despite their multibillion-dollar fourth-quarter losses and expectations of further red ink this year.

That’s it! Expose taxpayers to even greater risk by placing an even greater share of the financial weight load on lenders with an implicit government backing.  Meanwhile, half the people in the room don’t even understand what’s happening.