Fannie Mae-No Politics (FNMA)

[kthomp19]

Once again you are quoting a portion of a paper that has been thoroughly debunked. As Tim Howard explained:

SCS next make an unconnected, and incorrect, observation about two items in the cash flow statement for 2009: Purchases of Loans Held for Sale ($109,864 million), and Purchases of Available for Sale Securities ($165,103 million). They say, “Without these outflows, Fannie Mae would not have had a deficit in its 2009 cash position.” That’s incorrect for two reasons. First, Fannie didn’t have a deficit in its cash position; the alleged deficit was created by SCS by removing the borrowings from Treasury from Fannie’s cash flow statement. Second, the combined $275 billion in purchases were funded either by borrowings or asset sales, which do show up in the cash flow statement. All of the conclusions SCS make from the middle of page 6 to the rest of the section are made invalid by these mistakes.

SCS make a further error on page 6 that is important to note (and correct). They allege that the large volume of mortgage purchases in 2009 they incorrectly link to the cash flow shortfall was “an anomaly as the Treasury created a significant outflow of cash resources into the account of private investment bankers who had liquidity problems and were able to sell their toxic mortgages to Fannie Mae as ordered by Treasury.” SCS offer no support for this statement other than a footnote reference to a 2008 Blog Report from MyBudget360 stating that, “There is a report out by Bloomberg and now being reported by CBS Market Watch that Federal regulators are going to order Fannie Mae and Freddie Mac to start buying $40 billion a month in troubled mortgages.”

This report of “$40 billion per month in toxic mortgage purchases ordered by Treasury” has been given wide circulation, but it’s mythical.

It appears you haven't even read, let alone understood, Tim Howard's rebuttal. Instead you are just quoting a debunked paper as if it is the gospel truth.