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Fannie Mae and Freddie Mac: Killing the Golden Geese
September 10
05:50
2013
??by Eric Grewal
By Eric Grewal
Editor’s note: financial data within this column were taken from Fannie Mae’s 2012 quarterly annual results and a Freddie Mac 2012 investors report.
Mortgage-backed security is a dirty word these days. Allow it to slip out of your mouth and you’ll be harangued by policymakers who decry conservatorship and extol government cutbacks. Even President Obama has mentioned “winding down” the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, two government-sponsored enterprises that do business in trading mortgage securities. Known as Fannie Mae and Freddie Mac, respectively, these corporations buy and sell mortgages as securities.
The mortgage market was a prolific industry in the earlier half of the 2000s, but the crash of the housing market caused thousands of mortgage holders, namely homeowners, to default on their loans, slashing the value of mortgage-backed securities. In fact, irresponsible trading of sub-prime mortgages is known to have contributed to the recession itself, so it’s no surprise that many are cautious about the mortgage trade in this economy. Both Fannie Mae and Freddie Mac had to be supported by the Federal Housing Finance Agency in order to survive the recession.
Critics argue about the blatant use of economic intervention to bail out these companies, an issue that has troubled the American economic system for decades. Still others warn that mortgage trading will cause more instability in our fragile economy and housing market. Policymakers are hotly debating whether Fannie Mae and Freddie Mac should even be allowed to exist as government-sponsored enterprises and talks about their discontinuation ensue.
Despite their past, it is clear that Fannie Mae and Freddie Mac provide invaluable benefits to the government and should not be excluded from business. Fannie Mae and Freddie Mac have been successfully operating and they reaped in profits of $17.2 billion and $10.98 billion, respectively, in 2012, a healthy portion of which ended up in the nation’s wallet. In addition, the housing market has recovered enough and new regulations are in place so that mortgages are traded responsibly. Gone are the days of subprime mortgage sales and consumer manipulation.
Memories of the 2008 recession still loom close in the past, so it’s understandable that Fannie Mae and Freddie Mac have been under close scrutiny by members of the economic community. However, upward trends in lending and housing, as well as the success of the mortgage market demonstrate that Fannie Mae and Freddie Mac could be the golden geese of the finance industry. Dragging them to the chopping block now would be futile.
Eric Grewal is an Atlas Business Journal contributor and the Pacific Northwest District Treasurer for Key Club International
NTEK just scored a deal with the NFL
Multi-billion dollar deal!
We need some news
Whatever
No it's going to be a $100.00+ 2-3 years holding long baby!
Ntek looking good
This will see 0.0015 by Monday
Yeah, expect a massive jump in PPS eom. There's no stopping this baby.
You would think apple would buy nanotech out for There iTV they are working on
.14 by Friday
Ha... I sold at 2.00
Ill buy back in at .30
Back to 0.0002
This may go back down to 0.0010 next week with no news
They will continue to retire shares no need for an rs
Will see 2.00 in Eight months Easy
I can this at 10.00-20.00 a share in 5 years
Lol....whatever
I don't think so, I'm holding out for 20.00 a share
In a couple years we will be looking at 15.00 20.00 a share. What are your thoughts
Take a look at NTEK it's going to be the next Netflix
The information is on the nanotech website
Last Reported There was 67 shareholders, I think if they hold. There shares for one year out Support for the company, They should give a free T-shirt
I think every shareholder should get one for free
That would be one hell of a day
Why would they be watching this
When they have the ability To get in at the ground floor this is an opportunity to make Serious cash.
You know what I say shit or get off the pot!
What kind if Volume can we expect today Any guesses?
a prediction of $.30 Is a little too soon I would be happy if we see $.13 today
Yes sir
I was sell order for $20 a share I'm just gonna forget about it And come back in the a year or two
Monday is going to be a great day
:) $20.00
That's what I paid
NASDAQ to Reopen at 3:25PM
NASDAQ to Reopen at 3:25PM
NTEK will hit .09 - .10 today
NTEK will hit .09 - .10 today
NTEK will hit .09 - .10 today