The US Treasury officials and Administration reveal by their actions that they are not acting as savvy investors in the GSEs and trying to make a profit. It is about having full control of two essential lynchpins that directly affect the US economy in a very large and strategic manner. Through the GSEs the Administration in conjunction with the US Treasury (Jacob Lew), FHFA (Melvin Watt?) and Federal Reserve System (Larry Summers?) are reaching out to directly manipulate approximately 20% of the US GDP, an unprecedented amount of direct and indirect control over the economy.
So control in addition to profit is key when examining the moves made and not made. The referral to the GSEs as cash cows misses the point of political and economic control over a signifcant aspect and portion of the US economy. The desire to eliminate the GSEs is a political desire to eliminate the lynchpins now since they are more in the the Administration's hand and to wrest control from the Administration's current somewhat weak grasp that it has through the Treasury, Federal Reserve and if Watt gets in the FHFA.
In their place, new set ups are proposed (FMIC, etc.) which are not about making homes available to Americans, because the plans are implausible and just plain stupid and will not be able to do what is planned. The goals are more at to eliminate as much as possible the current governmental control exerted over the economy through the GSEs in conservatorship. It is not about us, the people. It is a battle over power and control of economic future of the US by the various factions of the political and economic elite.
The GSEs under the FHFA conservatorships are pawns in a fighting chess match for political power and economic control by a number of nameable figures, agencies and institutions who are playing hardball. The match has just started and we have gone a few rounds. There is way more to come. It will be MMA style cage fighting and not boxing. Everything goes.
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