Replies to post #303670 on Fannie Mae-No Politics (FNMA)

[frbronfen]

Lets go back to 2008. Then Paulson realized US needed a lot of money to recover from the crisis, and he preemptively seized control of GSE’s to make sure US funding ability would be unchallenged.
the agency bonds were a direct threat to the US Treasury. The only way he could have stopped GSE’s from doing what the GSE’s perceived as their charter was to take them over. It was possible the Treasury knew the ability of the market for their paper to take in all the agency bonds and it felt it would be detrimental to the issuance of the Treasuries back then.
The FED would do it instead, as the FED doesn’t need to issue any bonds to buy assets, just print currency backed by the assets. It was a perfect solution at the time
That would be the the reason for controlling the viable alternative to the treasury buyers.
Does this mean that there is not enough private capital to support the Federal debt and the GSE’s as well? In terms of bonds were FnF becoming a threat to the treasury?
what do you think about this?
Obit .Thanks in advance

[cfljmljfl]

Obit, good morning. Beautiful day in Milwaukee, wishing you well. Confirmation on the subject Charters. My understanding through experience is either party may terminate a Charter and end the relationship that brings to the parties. However, termination of the Charter does not terminate the life if either party. Is it correct to say the GSEs could terminate the Charter and continue a life as an entity? Is it correct to say that terminating the Charter would no longer force the GSEs to comply with the mission restrictions of the Charter? Bottom line is could GSEs survive as private entity without government Charter?