Days of Slaughter
-
- $31.99
-
- $31.99
Publisher Description
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. Fearing that confidence in the housing market would collapse completely if Freddie Mac and its competitor Fannie Mae failed, the US 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.
In Days of Slaughter, Susan Wharton Gates, a former 19-year Freddie Mac employee and vice president of public policy, provides a vivid eyewitness account of the competing economic and political forces that led to massive losses for shareholders, investors, homeowners—and taxpayers. 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.
The first book to tell the story of Freddie Mac from an insider perspective—while casting a prophetic eye to the future—this first-hand account of housing policies, complex financial transactions, and the crazy quilt of federal and state actors involved in the Great Recession is a must-read. A cautionary tale of failed policies and corporate mismanagement that compellingly addresses previously unexplored issues of political ideology, organizational dynamics, and ethics, Days of Slaughter will appeal to readers everywhere who want a fuller explanation of what went awry in the US housing market.
PUBLISHERS WEEKLY
As a former vice president of public policy at Freddie Mac, Gates is well positioned to explain the corporation's contribution to the 2008 mortgage lending crisis that nearly collapsed the U.S. economy. Freddie Mac and its sister entity, Fannie Mae, are the two government-sponsored entities (GSEs) that purchase mortgages from banks. They were once publicly traded but have operated as wards of the federal government since 2008. Much of this story has been well reported already, but Gates adds her own, sometimes juicy recollections of events inside Freddie Mac, along with updates on where things currently stand in the mortgage industry. Her book shines when examining the "serious fault line" in Freddie Mac's charter and the unresolvable conflict in the corporation's dual mission to broaden home ownership and ensure mortgage market stability. Gates admits Freddie Mac failed to achieve either mission, through she places plenty of blame elsewhere as well. Her recommendations about what should be done to avert another mortgage meltdown come across as surprisingly naive and largely unworkable, depending on vague, unenforceable notions about corporate ethics. Nonetheless, this detailed, thoughtful examination of the GSEs before, during, and after the crisis is a welcome contribution to the historical record of a turbulent time.
