Freddie Mac (FMCC)

[LuLeVan]

Stockprofitter asked on the FNMA board:

Bradford - how do you feel now that number 1 shareholder Bruce Berkowitz has sold all his shares?

My answer: Berkowitz' decision had nothing to do with the financial health of Fannie and Freddie. He sold his shares because "ownership" has become "an illusion": Bureaucrats can confiscate private property - to the tune of six trillion dollars - on flimsy grounds without compensation. They even get legal backing from the Supreme Court, in violation of the Constitution.

Bruce Berkowitz: "And after I lost 9-0 in the Supreme Court of the United States on the issue of can the government continue to keep all the money that Freddie and Fannie earn, and you have to come to the conclusion that in highly regulated industries there's a possibility that ownership is an illusion. In other words, if one bureaucrat can decide that two companies with five or six trillion dollars of assets can be taken in the name of National Security, well whatever you want to come up with, then what does that have to say about your ownership position in those companies where the owners had no say, no vote and where companies don't even talk to the owners? It's uh, so normally I would be a very heavy investor in banks today... but how do you invest in a business where again one regulator on one panicky day can take your assets away from you?"

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