Covering the Fannie Mae and Freddie Mac Takeover

By Kelly Carr, Travis Grabow and Carol Legg
September 8, 2008 01:06 PM

The coverage by most media on the government bailout of Fannie Mae and Freddie Mac is massive, as it should be. This takeover is one of the biggest business stories of the decade.

From analyzing the stock market’s response to honing in on local ramifications, newspapers like The New York Times and The Wall Street Journal amped up coverage to offer readers every detail as the story unfolded. Other papers found unique angles to report the news and some embraced new media techniques, answering readers’ questions in a live forum.

The New York Times provided in-depth analysis, including multimedia components, to help explain the significance of a government bailout. One story detailed Monday morning’s buzz on the floor of the New York Stock Exchange as the Dow Jones Industrial Average immediately surged more than 340 points.  

Another piece by Floyd Norris, the Times’ chief financial correspondent, began with a biblical quote that would later set up the notion that Fannie Mae and Freddie Mac, “were intended to serve at least two masters – the investors who put up the capital and a government that wanted to help the housing industry and extend home ownership. In the end they failed to serve either very well.” His eloquently crafted piece explains the takeover and its potential consequences with sophistication and ease.

Finally, the Times brought the subject home to consumers with a story that explains what the takeover means in their world, from the fallout on mortgage rates to the affect on tax dollars.

In addition to complete coverage of the breaking news, The Wall Street Journal also gave its readers a breakdown of the winners and losers of the takeover. In a unique, spunky story, readers can understand the major players and how the bailout affects groups like homeowners and lobbyists.

The Charlotte Observer brought the story  into local focus by explaining how Charlotte’s banks, Bank of America and Wachovia, view the government’s move. The Baltimore Sun also took time to explain how the takeover is bad news for the city’s Legg Mason and its fund manager Bill Miller. The story explains the nightmare Legg Mason Capital Management Inc. now faces as Freddie Mac’s largest shareholder.

At The Boston Globe, business reporter Kimberly Blanton talked directly with readers and answered their questions about the unfolding story. Through an interactive feature on the paper’s Web site called “News Chat,” Blanton explained to a confused and interested audience how much the takeover could cost taxpayers and how the move might affect mortgage rates.

The chat was offered in addition to extensive coverage on the Globe’s Web site and stories slated for Tuesday’s paper. Blanton said that while the discussion takes some time away from reporting for the print edition, “News Chat” offers a new platform to engage readers.

“Readers do ask basic questions and often insightful questions, so this seems a way to answer them in a timely way -- as the news is unfolding,” she said. “A lot of the research that reporters do never gets in the paper but we can share it with readers this way.”

Also stepping outside mainstream coverage was Reuters’ reporter Karey Wutkowski who worked a story that detailed how employees of Fannie Mae and Freddie Mac were coping with the changes. In her report, she describes an anxious group, most of whom are waiting for updates from their direct supervisors before searching for new jobs.

Other coverage highlights include:

San Francisco Chronicle
The San Francisco Chronicle personalized the government's move by relating the buyout to the credit situation. The Chronicle examined how even creditworthy consumers with steady income, good track records and credit standing are being turned down for loans. The Chronicle cites several local examples of consumers who had their credit limits and home equity lines slashed due to the tight credit situation. The Chronicle notes that "government guarantees for Fannie Mae and Freddie Mac could help the mortgage market, but it’s not clear how much or for how long."

The Washington Post
The Washington Post put a personal spin on the takeover with a Q&A section titled "What the Takeover Means for Your Mortgage." The paper outlines exactly how the plan will work and what's in store for both Fannie and Freddie. The Post also described the events leading up to the takeover in a detailed multimedia timeline that shows exactly what brought on the government's move.

Los Angeles Times
The Los Angeles Times emphasized the takeover's impact on investors and how it fits into existing financial conditions. While the Times suggests that the takeover may "buoy investors," next week's earnings reports, the strengthening dollar and the shift in emerging markets will also be considered by investors in the near future.

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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism