U.S. Treasury Secretary Henry Paulson made the rounds of all the media outlets this morning, touting his bailout rescue plan of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
"This is not something I want to do, but this is necessary," said Henry Paulson in a interview with CNBC.
Paulson said the housing downturn is at the heart of the problems facing the economy. "There's no doubt that there's fragility in the capital markets," Paulson said.
Paulson added that foreign central banks were concerned about the GSEs and that overseas buyers had stopped supporting GSEs.
Paulson said the pending U.S. election did not influence the decision to take over the GSEs.
Paulson noted Fannie Mae and Freddie Mac had a thin layer of capital and that it required immediate attention.
Paulson said that the takeover of the mortgage-based securities is temporary.
Speaking in an interview with Bloomberg TV, Paulson added that the decision to take over Fannie and Freddie wasn't difficult and that the decision was made one week ago.
Paulson commented the he wouldn't be able to say if will cost taxpayers.
Paulson commented that he expects some pushback from some members of Congress. He noted that the key to stabilizing the markets is the availability of home loans.
Speaking earlier in the morning to CBS, Paulson said that expects economic turmoil until the housing crisis subsides.
Paulson noted that Freddie and Fannie had flawed business models.
By Steve Stecyk and edited by Nancy Girgis
©CEP News Ltd. 2008