Fannie Mae-No Politics (FNMA)

[philipmax]

I am not sure that the treasury actually "lent" money ($187B)to these GSEs. All that was required was for the Treasury to "say" that it would stand by these entities. There was no need to infuse capital into these entities, they were solvent throughout.
In the meantime, FnF were consistently issuing new mtge backed bond during these 5 years of stress.
Would they have been able to do so (at reduced near zero rate) if they were insolvent? Another words, would the market have permitted them to issue near zero interest bond if they were teetering?

The only money that they took from Treasury was the 10% dividend that Treasury demanded. So Treasury "lent" the GSEs the money to pay itself the 10%.
When FnF proved that they could pay the div. independently of Treasury, the rules were changed and Treasury "confiscated" 100% of FnF earning.

This whole story is an Alice in Wonderland, tops y-turvey of equitable Laws, and smacks of medieval confiscation of private property.

It's OUTRAGEOUS!