November 23, 2007 (LPAC) - Lyndon LaRouche declared that the Democrats were "flunking" foreclosure crisis back on August 29, 2007. And, he warned that those Democrats who were pumping up Fannie Mae and Freddie Mac as a solution would have to "eat those words, and soon," see House of Representatives Bill Ignores Bank Crisis.

Why did it take Lazard Freres client, the Washington Post so long to figure it out?

The Washington Post devoted it's lead editorial today to denouncing the foolish Democrats in the Congress who are proposing that Fannie Mae and Freddie Mac, the government-sponsored privatized agencies which back up $4.8 trillion in mortgages in the U.S., bail out the sub-prime mortgage bubble. The Post, of course, has no better plan, and refuses to mention the FDR-solution proposed by LaRouche, but they correctly note that Fannie and Freddie are themselves facing a disastrous collapse, and that "this is no time to pile new risks on top of those - known and unknown - that Fannie and Freddie already bear."

Called "No Rescue Here," the Post says that with both Fannie and Freddie reporting huge losses, "their own safety and soundness come first." Freddie has 15% of its holdings in sub-prime-backed junk, while Fannie has 6%, or about $42.4 billion, according to the Wall Street Journal, and Freddie will have to write off at least $5 billion of its holdings next year (in addition to the $2 billion loss reported this week). Freddie is now only $600 million above its legal capital minimum, and will be issuing $5 billion in preferred stock next week. Will anyone want it?