Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

I hear you! The whole thing is kind of hilarious in that the federal government created these special purpose entities in 1968 and 1970 with private capital AND as private profit making corporations but decided to Nationalize them on August 17, 2012 as they were on the verge of escape from the "conservatorship".

If the federal government is victorious in all the remaining litigation by shareholders then the twins will simply become another branch of the federal government with all their inefficiencies and waste.

There will be a dearth of Executive talent as those individuals best suited to effectively and efficiently run such gargantuan enterprises put their talents to more lucrative endeavors.

Eventually the federal government will have to include some if not all of the $7.2T in MBS outstanding on their balance sheet and it would be a loss for the American taxpayer as well as shareholders who believed that the federal government would follow HERA and rehabilitate the gses and return them to their rightful owners.

Finally it would create a bad precedent when the next financial crisis inevitably arises as board of directors of shareholder owned companies will choose massive layoffs, cutting expenses to the bone and attempting to survive without governmental assistance as they fear potential Nationalization.