Wall Street sharpies are trying to run off with Fannie Mae (and Freddie, too), a twist on politicos who would either shut it down, wish it would go away, or would drag off the old honey-pot for constituents. The companies' stockholders were back in court this week, insisting that Fannie/Freddie went through a sort of bankruptcy reorganization and are now repaired and profitable. And, therefore, should be theirs to profit from once again. I have some admiration for true financial buccaneers, the ones who take great risk for great reward. Think Geena Davis with a dagger in her teeth, swinging from a yardarm. However, Wall Street has always included slippery crews, working angles and legalisms, risking little while taking pigeons, often from the public sector. The weasels of finance. The beginnings of Fannie (and Freddie) Begin at the beginning. Fannie was created during the Great Depression to help the supply of mortgage credit, and it did. Joined in 1971 by its Siamese twin, ...
- Fannie Mae and Freddie Mac's stockholders were back in court this week, insisting that Fannie/Freddie went through a sort of bankruptcy reorganization and are now repaired and profitable.
- Fannie’s last eight years have been weird. It has paid back all the bailout money. It has also shoveled all profits to the Treasury.
- Without those retained earnings, it is certain one day to need another bailout. We continue to transfer all of those earnings to the Treasury because of one oops-a-daisy in 2008: We neglected to wipe out Fannie’s stockholders, who are now trying to regain control.