John A. Courson, chief operating officer of the Mortgage Bankers
Association, a trade group, also pointed with relief to the statement
by the Treasury secretary, Henry M. Paulson Jr. on Sunday morning that Fannie and Freddie would examine the fees they
charge banks for loan securitization services, “with an eye toward
mortgage affordability.”
Don’t they…um…"need the money"? And:
“The government doesn’t have a great deal of interest in foreclosing on
a ton of homes,” said Kurt Eggert, a law professor at Chapman
University in Orange, Calif., and a former member of the Federal
Reserve Board’s Consumer Advisory Council.
And:
While it is not yet clear whether stockholders in Fannie Mae and
Freddie Mac will be wiped out entirely, Mr. Paulson did say on Sunday
that the entities “will no longer be managed with a strategy to
maximize common shareholder returns.”
That’s some theorem. Here is the article.
The common shareholders remain, the preferred remain (though subordinated to the U.S. government), and the checkbook remains.
Privatize the profits (though at least without pretending that EBIT is profit) and socialize the risk.
FNMA has the best data available for risk management and risk analytics. If we assume they behave optimally, then the current charges (which, btw, didn’t cover the current costs or they wouldn’t be in this mess; thank you David “son-of-Roger-acts-like-Harry” Mudd) are the minimum that would be reasonable.
Since someone appears not to be assuming that, the hole you think was just burned in your pocket…was just burned in your pocket. And Daniel Davies’s Three Laws abide.
I agree with you mgunn, seems like the US is about to take a big leap in the direction of Europe in socialism these coming years.
Wait wait…
Congress and mortgage executives use two government sponsored entities to make horrible business decisions. As a result, the US mortgage market is tumbling into the abyss. Now the government can step in and take over a large portion of the economy…
This sounds strangely familiar.
http://www.naomiklein.org/shock-doctrine
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