- For Many in US, It Will Be a Scaled-Down Holiday Season
- Judge Erases Couple's $525,000 Mortgage Payment
- Where Do Pardoned Turkeys Go?
- Foreign Demand Boosts US 7-Year Treasury Sale
- New-Home Sales Jump to Highest Level in Over Year
- Consumers Catching the Holiday Spirit
- Jobless Claims Below 500,000, Durable Orders Slip
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Garlic Price Rises Surpass Gold, Stocks in China
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- S&P Stocks Trading at New 52-Week Highs
- 4 Food Stocks to Stuff in Your Portfolio: Analyst
- S&P at 1050-1200 Trading Range Next Year: Strategist
- Treasury On Mortgage Modifications
MOST SHARED
- Ritz-Carlton ?Struggling? in the US: President
- Garlic Price Rises Surpass Gold, Stocks in China
- Half of Banks' Losses May Still Be Hidden: IMF Head
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- S&P Stocks Trading at New 52-Week Highs
- Oil Price to Average $75.40 in 2010: Poll
- Consumer Mood Improves, But Anxiety Over Personal Finances
- Americans Ditch Planes for Trains this Thanksgiving
- Jobless Claims Below 500,000, Durable Orders Slip
- US Bonds Pare Losses After 7-Year Auction
Text Size 
Uninsured depositors, including company payrolls, are the next "potential iceberg" for the U.S. economy, said Larry Lindsey, CEO and president of The Lindsey Group economic advisory firm.
"All you need is one case where the uninusured depositors, the big deposits, don't get covered, and you have the potential that they start to run," he said. "To run an economy, to have a function that works, you've got to have a place where people can keep their money safely ... Unfortunately, the way the Congress has structured it now, that's not the case." (See video for full interview.)
The futility of Congress' bailout bill for mortgage lenders Fannie Mae [FNM
Loading...
()
] and Freddie Mac [FRE
Loading...
()
], which includes no reforms to put limits on the companies and prohibits risk-based pricing, also a presents problem for the economy, Lindsey said.
It does nothing to protect Fannie and Freddie's securitization function, a "vital" part of the economy. It does, however, continue their role as hedge funds, a benefit only to shareholders, Lindsey said.
"You'll notice that since the plan passed, mortgage rates have actually risen in the country," he said. "That's because we have a less competitive market."
Lindsey suggested the government should do a de facto nationalization of the two companies to eliminate their role as hedge funds. This would eliminate the government-backed shared monopoly created by the bill, he said.
Print
Email
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- It may be the most unusual guide to business you'll read.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes