Replies to post #319249 on Fannie Mae-No Politics (FNMA)

[navycmdr]

WRONG again ... the GSE's don't issue a SINGLE LOAN

the BASTARD CORRUPT CONGRESS paid FOR by the

CRIMINAL BANKS ISSUED EVERY LOAN that FAILED

CONGRESS forced the GSE to take a higher percentage

of the SUBPRIME CRaP LOANS and the SNOWBALL BEGAN

[Mikey Mike]

Actually, it's quite the opposite. Fannie and Freddie had enough capital to support themselves...The problem was they didn't have enough capital (liquidity) to support all the banks dragging them down...subtract all the the money given back to the GSE's through wrongfully selling unqualified loans from what was supported by the government and you'll find that the GSE's flourished with more than sufficient capital...

[Fuse78]

The gov loosened standards.... TBTF banks took advantage with blatant fraud...ie, the "Hustle"
Market crashed... Gov needed Fannie to bail everyone out... Then gov put them in cship with fraud accounting...
Gov (FHFA) sued banks on behalf of Fannie and garnered Billions in fines ( basically the banks were found guilty)...
Treasury took all that money into their corrupt slush fund and left taxpayers on the hook instead of using that money as a buffer for another market crash.
So the gov and TBTF banks were at fault....
Case closed.... Thanks for stopping by...

[Donotunderstand]

but

there can be a parallel set of paths --- and they could be started fast

recall the Berkowitz proposal included new private capital an no profit to equity in the NEW company for five years (all profit to go to capital building)

recall I think -- if the financials bear it out - that FNMA (assume two companies for simplicity) could use the GOV 79% ownership to raise say 30-60B in capital. There would be more shares (hopefully 2:1 or 3:1 and not 4:1) --- but there would be 30-60B of capital - the end of the sweep, the sr paper extinguished -- construct of private ownership re established -

and yes on the other track
Goals for risk sharing with private banks
Goals for risk sharing with private pensions etc
There could be a remaining "conservator" still there for 12 months --- or a regulated utility model could be announced and explored (recall utilities did real well under regulation --- it is a private sector semi monopoly)

both paths can be pursued if they want it