Bubble Wrap

Bernanke says RE downturn is orderly, but Fannie and Freddie at risk

The New York Times reports Bernanke Calls Housing Downturn ‘Orderly’.

“The downturn in the housing market so far appears to be orderly,” Mr. Bernanke said during a hearing before the House Financial Services Committee.

One of the things that Mr. Bernanke and his Fed colleagues are keeping close tabs on is the extent to which a housing slowdown will dampen overall economic activity.

But he also signaled problems with the two federal mortgage lenders.

Mr. Bernanke said that the large holdings of the mortgage giants Fannie Mae and Freddie Mac did “present a systemic risk” to the nation’s financial system.

He previously has called on Congress to restrict their holdings.