Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

Tim Howard was RIGHT! MC has this idea of a Nirvanna with MULTIPLE TBTF MBS ISSUERS with Federal Government Guarenteed MBS competing head to head with the twins (and throw in life insurance companies, nonbanks, and other FI's). In his view, this will "create more competition and innovation", but the reality is it will be a race to the bottom again just as in 08/09. That's why I think he wants to OVERCAPITALIZE the twins, so the TBTF banks and the twins are on an "even playing field", which they WON'T BE because as Tim Howard astutely pointed out, the TBTF banks get funding from these short term deposits (e.g., checking and savings, cds,etc) & then they can lend long on mortgages at HUGE SPREADS, especially compared to the twins longer term cost of funding and THIS IS EXACTLY THE CAUSE OF THE 1980'S S&L Crisis.