Fannie Mae-No Politics (FNMA)

[4Duxs]

ValueWalk article:

Large Banks Unprofitable Without Government Backing: Penn Study
by Mark MelinMay 02, 2014, 12:41 pm

Large banks reap $102 billion benefit from US government
Based on previously reported estimates of the value in a government risk guarantee, the large banks receive “the combined financial advantages and subsidies for the six biggest U.S. banks since the start of 2009 was at least $102 billion.”

Report author Nizan Geslevich Packin from the Penn’s Institute for Law and Economics connects the dots, pointing out that follow up studies estimate that “the profits of two of America’s large banks would have been negative if not for implicit and explicit government subsidies.”

Why does the government’s free insurance policy help the large banks so much? “The most significant implicit subsidy stems from market perception that the government will not allow the biggest banks to fail — i.e., that they are “too-big-to-fail” (TBTF) — enabling them to borrow at lower interest rates,” the report says. “While the Dodd-Frank Act attempts to solve the TBTF problem, it does not prohibit the government from giving financial support framed in a general fashion.”

In other words, crime pays for the large banks. The fact is they have engineered a system where criminal actions are seldom investigated — and this is hard to value.