Disaster to buy

2008-7-15  |     NEWSPAPER EDITION

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THE United States Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an "unmitigated disaster" and the largest US mortgage lenders are "basically insolvent," according to investor Jim Rogers.

Taxpayers will be saddled with debt if Congress approves US Treasury Secretary Henry Paulson's request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. The chairman of Rogers Holdings, who in 2006 correctly predicted oil would reach US$100 a barrel and gold US$1,000 an ounce, also said the commodities bull market has a "long way to go."

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