When you have luminaries like Freddie Mac CEO Richard Syron telling investors that peak-to-trough, housing should decline 15 percent, it's hard to estimate what kind of psychological and economic damage it will do to housing and the overall economy.

We're only half way to the trough, according to the pessimistic Case-Shiller Index, where home prices were calculated to have dropped 8 percent in 2007 from 2006. By the National Association of Realtors calculations, home prices dropped 1.4 percent in 2007, so we're hardly out of the starting gate.

Oil prices have struck new records over $107, grocery staples like milk and bread have doubled over the last year, and the stock market has taken a 2,000 point tumble. NAR economists believe gross domestic product and real disposable income will recede to half the 2006 (1.5 percent, and 3.2 percent respectively) rate. Inflation will be elevated at 3.2 percent.

Uncertainty about the markets has migrated to commercial real estate, which is essentially flat, says the NAR. After witnessing single-family and multifamily housing stagnate, developers are beginning to wonder if existing office spaces will rent.

There's a lot to be anxious about, but what if the worst doesn't come true?

The NAR predicts home prices will drop another 1.2 percent in 2008, but anticipates a turnaround in 2009 that will overturn both years of losses in 2007 and 2008. That's a far cry from a 20 percent depression in housing.

So why is there such a difference in outlook? Why is Syron so down on housing prices?

The answer might be found in his written testimony to Congress on GSE reform in February. This took place one day after temporary loan limits were imposed by OFHEO, which oversees Freddie Mac and Fannie Mae.

Syron points out that it's part of the GSE's mission to buy mortgages and hold them to "maintain the liquidity, stability, and affordability of the conventional conforming market."

He goes on to note that extending credit to weaker borrowers while expecting housing price increases to balance risk was unrealistic.

He then expresses concern about the "efficacy of legislation that imposes more and deeper-targeted housing goals on the GSEs, as well as additional duties and penalties."

Looks to me like he didn't want to raise Freddie Mac loan limits . The reason? Investors. Syron is in the impossible position of all CEOs -- balancing customer service (the U.S.government and its citizens) and profits for investors.

While Freddie Mac may be playing ball with OFHEO and Congress, Syron may have found other ways to slow down Freddie Mac's exposure to higher loan limits on conforming loans.

The GSE has announced suddenly tighter standards for mortgage lenders and how they use appraisers to reduce conflicts of interest. The benefit to consumers is less risk, but it also lowers risk for Freddie Mac.

So does a dire prediction about housing prices. If he can slow down the number of high-exposure conforming loans that Freddie Mac has to secure, then he has a better shot of reversing $3 billion in losses in 2007.

In a meeting with analysts yesterday, Syron made it clear what his fiduciary duty is -- to shareholders.