Fannie Mae-No Politics (FNMA)

[big-yank]

Kudos. Very well stated. I have stated for years, here, that unless Fannie and Freddie helped relieve the toxic loan inventory from mortgage banks, the housing market (and broad economy) would have frozen and ignited a depression. The GSEs in such a doomsday scenario would then serve no useful purpose and would simply wind down on their own. There is a section in Paulson's "On the Brink" that spells this out quite well, from my recollection.

It is also "way too easy" to look at how much of that burden was later relieved by the Fed during Quantitative Easing I & II so that the GSEs were not hung out to dry and be unable to recover with the market... which is exactly what took place.