Freddie Mac-No Politics (FMCC)

[rjanderson383]

Responding on this board as well. Relevant.

Both GM and FNMA/FMCC were bailed out during the recession.

4 years ago is when bankruptcy occurred after bailout.


So why didn't FNMA/FMCC become bankrupt as well????

That is the first question:

My answer: GM consisted of having a failing business model. Why were they failing? Other companies like honda and toyota were destroying them and taking all of there market share. People need cars, but they don't need GM cars.
Lets say that K-mart is a failing massive company(no clue to actual situation of kmart). A bailout will only deter bankruptcy for a period of time... why? because a failing business model is a failing business model.

Now lets look at FNMA/FMCC. Do they have any significant competitors? NO. Currently they are backing 90% of mortgages. Is there business model a failing business model? NO , recent billions of dollars of profits prove they are a success. So why did they fail in the past? Bank of AMerica and other banks scammed them and are now paying back billions and billions to FNMA/FMCC.


If Fannie was going to be bankrupt, that would of happened 4 to 5 years ago.