In Henry M. Paulson's first month as Treasury secretary, two deputies flagged Fannie Mae and Freddie Mac as significant risks to the economy. He didn't share their level of concern. When he was at Goldman Sachs, he told the aides, the mortgage giants weren't on the list of things that kept him up at night. Two years later, they're at the top of his list. Mr. Paulson is embroiled in emergency planning on ways to shore up the companies to avert a destabilizing jolt to the U.S. economy and the world's... read more
