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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