As the terror of the financial crisis recedes, many folks have forgotten about the two huge taxpayer-owned mortgage companies, Fannie Mae and Freddie Mac.
But they're still there, money-manager Barry Ritholtz reminds us.
And they're still sending billions of dollars of taxpayer cash directly to Wall Street, in what might be described as the "perfect bailout."
How does this bailout work?
Fannie and Freddie got a "blank check" from Treasury Secretary Tim Geithner at the end of the financial crisis. This blank check allows the housing giants to lose as much money as they want, with the taxpayer footing the bill.
Fannie and Freddie use much of this money to buy mortgages from Wall Street at what may be grossly inflated prices. This is a super arrangement for the banks, because they get to unload all their terrible mortgages at prices that won't produce losses. And it's fine for Fannie and Freddie because, well, because they have the blank check.
But of course there's no free lunch. And in this scheme, the US taxpayer is, as usual, footing the bill.
In other words, Fannie and Freddie are now doing what the Treasury wanted the original "TARP" bailout to do--use taxpayer money to help banks clean toxic assets off their balance sheets. Unlike the original TARP, however--which justifiably outraged taxpayers--no one knows or cares about what Fannie or Freddie are doing.
So, it's the perfect bailout.
We should do what the Egyptians did and protest until the government stops all of this madness and we can get them all out of office and we can get this government under control and feel in control again.
Hmm-m-m, Fanny Mae deserves to have her fanny spanked raw, and Freddy Mac deserves to be shut out in the cold ("al freddo", as ruined Italian American former home owners might put it). While we're at it, put Fannie Mae's raw, cold-sensitive fanny out in the cold, too, and let them both freeze to death! Short of that, freeze their assets before they get to Wall Street.
I bought a 1000 shares of each when they were around .30.....I don't really care about the politico crap.....I didn't create the ocean, but I sure like riding the waves when you can see them coming. I'll take a few bucks and call it a day.....I'm over the fight!
The stock has gone from a LOW of 27c to 66c now! Last 2 weeks.
It is fantastic time to refinance home mortgage. As Clark Howard says it is very tough to find these low rates for long time. Search online for 123 Mortgage Refi they found me THE lowest possible rate.
The economy has officially moved from recovery to expansion. From the point an economy bottoms, at the end of a recession, to the point it reaches its prior high, that's a "recovery." Thereafter, until the next peak, it's considered an "expansion."
Washington and Wall Street are f**king the US taxpayer. ALERT THE MEDIA!!! Oh, yeah, the media is co-dependent - forgot.
Fannie and Freddie's rape of the American tax payer makes little difference. As mentioned yesterday, commercial loans will be the downfall of the banking system and there is no way for the banks to launder those losses through Fannie and Freddie. With the Rep's in charge of the house, the banks will have a harder sell when they come looking for a bail out this time.
A fish rots from the head down.
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