Fannie Mae-No Politics (FNMA)

[FOFreddie]

Jason Thomas who was then the Special Assistant to the President for Economic Policy as part of the National Economic Council sent this Memo to Robert Steele who was then Under Secretary for Domestic Finance of the United States Treasury

http://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-03-08_Treasury_Email_from_Hason_Thomas_to_Robert_Steel_Re_Source_document_for_Barrons_article_on_FNM.pdf

This Memo was intentionally leaked to Barrons on March 8, 2008 which was a week before mortgage market instability led to the failure of Bear Stearns and two months before over $ 5bn of new investor capital was raised for the GSE's including the issuance of FNMAT.

Check out the last page (page 12):

3rd to last paragraph: " As shareholder capital gets wiped, the government will have no choice but to seize the company and place it in conservatorship or receivership" - THIS WAS TWO MONTHS BEFORE FNMAT WAS ISSUED AND SYNDICATED TO INVESTORS IN MAY 2008

Last two sentences: " A nationalized Fannie Mae would be refocused to directly address the various problems of illiquidity, affordability and sustainability in the mortgage market. Without the need to satisfy a fiduciary duty to shareholders, Fannie might finally be able to perform its affordable housing mission in a helpful and proactive manner."

If this is not a breach of the implied covenant of good faith and fair dealing and a constitutional taking - what is?