The appealing nicknames Fannie Mae and Freddie Mac designate the United States financial institutions charged with refinancing the mortgage loans banks present them with. Fortified with these assets, the two refinance themselves in their turn on the bond market, according to a classic technique born in nineteenth century Germany, then France, and consecrated by the creation of Bismarck's mortgage banks and Napoleon III's Crèdit foncier. Now the last witnesses to that classicism threaten to be carried off in their turn by the financial crisis. Out of resources, the American Treasury has consequently gone to Congress to ask for authorization to take shares in the two institutions' capital and increase their lines of credit, the sort of nationalization the left wing of our own Socialist Party would not disavow. For its part, the Fed promises to admit them to its discount window, a procedure that had up to now been reserved for banks.... One measures the gravity of the situation by this "run for your life" doctrinal earthquake. And even the most superficial analysts observe that in this set-up, the lender of last resort - the loser - can only be the American taxpayer.

    This is not the only front on which the Treasury and the Federal Reserve have been forced to convert to the kind of dirigisme that only yesterday was vigorously denounced in those quarters. Before the same Congress, the two officials recommended reinforcement in the oversight of investment banks and of Treasury bill specialists, hardening of regulation, updating of their system of financial regulation, which, by their own admission, is "outmoded." And on the joint front of securitization bankruptcies and rating agency failures - which are linked - the American market authority, the SEC, reveals at the end of a belated investigation that those agencies were unable to master the conflicts of interest between rating, commissions and sales, between their dependence on the investment banks that pay them, respect for their own internal procedures, and the ways their analysts - at once overpaid and overloaded - are remunerated.... The exposition alone of all these breaches is sufficient as a basis for diagnosis and judgment.

    The professional is astonished by the system's lack of professional seriousness, especially over such a long period; the economist notes that the unbridled taste for profit - the spring in the market's mechanism - has, in this case, dismembered the market; the sociologist points out the deviance of a milieu that has transgressed its own rules; the moralist, its forfeiture, quite simply, of any honor. The commissions and the committees busy themselves in the "never again" mode. The bondholders and the taxpayers, so often the ones burned in last resort, ask, "how much longer?"

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    Translation: Truthout French language editor Leslie Thatcher.