Explaining what the Fannie/Freddie bailout means to readers

The Deal executive editor Yvette Kantrow writes about how the business media performed in explaining the implications of the federal government’s bailout of lenders Fannie Mae and Freddie Mac to average readers.

Kantrow writes, “For its sheer lack of pretense, we sort of liked New York magazine’s Intel blog’s approach to the story. It produced what it called ‘The For-Idiots, By-Idiots Guide to the Fannie Mae/Freddie Mac Bailout,’ which was surprisingly comprehensive and not really dumb at all, especially compared with the more earnest but less nuanced, not to say ironic, reports put out by other news outlets. First on that list comes from suicidally cheery CNNMoney.com, which started one of its Polyanna-ish reports on the bailout by imploring mortgage applicants to ‘rejoice!,’ since rates could drop by 1 percentage point. Yippee!

“Alas, that’s not what most newspapers were saying, including The New York Times, which in its page 1 story on what-the-bailout-means-for-you-dear-deadbeat noted that ‘the emerging consensus is that the government takeover will help stabilize rates’ or, if we’re lucky, rates ‘might even fall a quarter of a percentage point or so.’

“For its part, a widely disseminated Associated Press report pegged the possible rate decline at as much as half a percentage point but warned that ‘continued investor wariness and a depreciating housing market will keep rates from dropping further.’ Bummer.”

Read more here.