Fannie Mae-No Politics (FNMA)

[Guido2]

Few years ago, it was explained that the main reason for conservatorship in 2008 was that China, Russia and other countries were major holders of MBS issued by Fannie and Freddie. Hank Paulson wanted to reassure them that their investment was safe. Federal Reserve has taken over the role of these foreign countries. Someone here explained that the Fed is owned by TBTF banks. It follows that the continued conservatorship is in the interest of these banks.

I don't recall ever reading that China was an investor in either the commons or preferred. Not saying they weren't, but would like a source that confirms this.

There is a Congressional Report from 2009 that supports some of what I have written above. I am having trouble posting the link to that pdf file. Do a Google search for "China and the Global Financial Crisis: Implications".