Dec
08

Crummy Conservatorship

fannie and freddieSince bailing out Fannie and Freddie to the tune of $188 billion, the Treasury has taken all their profit and is slowly taking all their capital. By 2018, F&F will have none. Unfortunately, F&F are becoming less profitable as they shrink their portfolios of mortgage-backed securities and focus on issuing guarantees. With no capital, a small loss will necessitate another bailout even though it won’t be due to mismanagement.

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  1. Richard says:

    Money is not gold and silver. Money is debt. Banks create it.
    What is important is housing and affordability. Fn & Fr were
    created in the beginning to make housing more available because
    they offered bankers a way to shed (collateralize) the debt they created
    and make more money.
    When F&F are gone, who will make home loans???? (or at least make a
    way for the Bankers to make more debt, i.e. money)

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