I don't understand this part: "Why can’t you bring Fannie and Freddie out of conservatorship? A huge piece of the puzzle: resolving the nearly $6 trillion in debt and securities issued by the company. These securities are treated with near-sovereign status—the Federal Reserve has bought more than $1.6 trillion in government-guaranteed mortgage bonds in its bid to stimulate the economy—thanks to the government’s open-ended support of Fannie and Freddie. That support throughout the downturn is the only reason that investors have continued to buy mortgage-backed securities, which has kept borrowing costs very low for American homeowners.
Ending the conservatorship without dealing with that debt is likely a nonstarter for Treasury, since the very reason the U.S. took over the companies was to soothe uneasy bondholders. There are two hypothetical options here, says Mr. Parrott. Release the companies from conservatorship with a government guarantee of their debt, and release them without one. “Neither is economically viable,” he writes." (Emphasis added)
Parrott seems to be claiming that a) $1.6T in QE spending was to support FnF ("the Federal Reserve has bought more than $1.6 trillion in government-guaranteed mortgage bonds in its bid to stimulate the economy—thanks to the government’s open-ended support of Fannie and Freddie."); b)this QE support kept investors buying MBSs ("That support throughout the downturn is the only reason that investors have continued to buy mortgage-backed securities...")
Unless I'm missing something (happens) these premises make no logical sense and do not match fact-based reality. The government's support of FnF netted out to $187B, QE was only designed to stimulate the economy in a more general sense by keeping the capital markets open, and investors other than Treasury that bought MBSs did so because they found them compelling investments regardless of Treasury's purchases.
Conclusion: More BS
News 
Market Data 
Discover 
