Fannie and Freddie’s Huge Christmas Bonus

While Americans across the country hustled and bustled for last minute gifts and holiday preparations, our wizards in Washington tied a big red ribbon on a blank check made out to Freddie Mac (FRE) and Fannie Mae (FNM). In the process, a future of socialized housing finance has been increasingly solidified.

Why would the Obama administration pass this blank check under the cover of darkness on December 24th? In hopes that America had just settled down for its long winter’s nap and would miss this act of pillage and plunder. The Wall Street Journal highlights this ‘blank check’ in writing, U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy:

The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.

The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.

Unlimited access to bailout funds through 2012 was “necessary for preserving the continued strength and stability of the mortgage market,” the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.

“The timing of this executive order giving Fannie and Freddie a blank check is no coincidence,” said Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee. He said the Christmas Eve announcement was designed “to prevent the general public from taking note.”

Let’s take note. Let’s ponder this development. What exactly does a blank check and unlimited access to bailout funds truly mean? I envision the following:

  1. A total lack of discipline and accountability in the distribution of taxpayer funds.
  2. A full government takeover of the U.S. housing finance industry.
  3. A socialized housing policy and accompanying programs.

If those developments do not revile you enough, the blank check is also a confirmation of the following:

  1. A failed housing policy developed and promoted over the last twenty years.
  2. The true legacy of those who fed from the Freddie and Fannie trough during the last two decades. Which legislative leaders piled their plates the highest with Freddie’s and Fannie’s payoffs? John Kerry (D-MA), Chris Dodd (D-CT), and Barack Obama.

Are you sick yet?

Blank checks are no way to run a country!! Capitalism has been under assault all year long and this year end shot is the ultimate kick in the balls.

These bums must be thrown out.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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1 Comment on Fannie and Freddie’s Huge Christmas Bonus

  1. What happened to your “full government takeover of the U.S. housing finance industry.” Obama administration just decided to close Fannie and Freddie.

    Stop feeding into the speculative idiocy that has consumed right-wing national dialog and try a more measured, fact based analysis that actually is constructive rather than just hate-mongering.

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