OBAMACARE: A FANNIE MAE FIASCO IN THE MAKING

FANNIE MAE FIASCO: The Tab for Fannie & Freddie: $1 Trillion and Counting

The following note was sent to me by Edward Pinto, the former Chief Credit Officer at Fannie Mae whom I have interviewed multiple times in the past. The most notable of my conversations was the one in which he clearly explained how the politics of affordable housing had, over many years, been chiefly responsible for the housing bubble which eventually burst.

Now, this leading expert on the GSEs says that very quietly, an unpleasant milestone was reached this month: the tab for the bailout of Fannie Mae and Freddie Mac has passed $1 Trillion.

What's worse is that in so doing, we've actually made our nation's overall financial footing more shaky. Take a look at his horrifying report:

Federal Bailout of Fannie and Freddie Passes $1 Trillion

Pinto on Mortgage Finance: analysis by Edward Pinto, consultant to mortgage-finance industry and former chief credit officer at Fannie Mae

Cumulative Federal support for Fannie and Freddie (the GSEs) topped $1 trillion this month[1]. It took only 10 months to reach this level. Support includes:

1. $95.6 billion - Treasury Department purchases of Fannie and Freddie Senior Preferred Stock to cover their losses.
2. $171.8 billion - Treasury Department purchases of Fannie and Freddie MBS
3. $704.7 billion – Federal Reserve purchases of Fannie and Freddie MBS
4. $86.4 billion – Federal Reserve purchases of Fannie and Freddie debt

$1.06 trillion – total expenditures

These investments in GSE MBS and debt represent 9% of outstanding mortgage debt and greatly increase the federal government’s already sizable participation in the U.S. mortgage market.

BOTH THE "PUBLIC OPTION" AND THE GOVERNMENT SPONSORED CO-OP WOULD IN EFFECT BE A GSE IN THE HEALTHCARE INDUSTRY AND FUNCITON AS WELL AS FANNIE MAE AND FREDDIE MAC DID - WHICH IS TO SAY THEY'D RAPIDLY BECOME CORRUPTLY AND INEPTLY RUN BY PIOLITICIANS, FORMER POLITICIANS AND THEIR CRONIES.

IF YOU LIKED THE HOUSING BUBBLE AND THE TRILLION BUCKS YOUAND I ARE GONNA HAVE TO COUGH UP TO PAT OFR THE MESS FANNIE MAE MADE, THEN YOU'RE GONNA LOVE OBAMACARE!

GOOD BACKGROUNDER ON THE GSE/FANNIE MAE FIASCO HERE AND HERE.

BOTTOM-LINE: OUR RECENT EXPERIENCE WITH FANNIE MAE SHOULD LEAD US TOWARD FEWER AND SMALLER GSE'S NOT MORE AND BIGGER.