Moral hazard

“In a statement timed to precede the opening of Asian markets Monday as well as Freddie’s closely watched debt auction, the Treasury said late Sunday it plans to seek approval from Congress for a temporary increase in a longstanding Treasury line of credit for the two companies. The Treasury also said it would seek temporary authority so that it could buy equity in either company ‘if needed’ to ensure they have ‘sufficient capital to continue to serve their mission’ of providing a steady flow of money into home mortgages.”