Peter Blane

Remember Fannie Mae and Freddie Mac?

Posted in Uncategorized by wusspett on February 12, 2011

The latest in the scandal of the largest example of government ownership in the private sector has me laughing.  If you haven’t figured out yet, I’m talking about the “company” that owns the majority of all mortgages in the United States: Fannie Mae and Freddie Mac.

In an article put out by The Street, it talks about:

  1. shareholders holding on to the stock against all hope ($150 billion in debt to taxpayers)
  2. how the new financial regulations will effect Fannie and Freddie (nothing yet lol)
  3. the Government’s options of what to do with the mortgage giants

The biggest part of the article – to me – was screaming at me to retell it: Fannie and Freddie do not have legal obligation to shareholders anymore.  That’s right, Clayton S. Rose, a director at Freddie Mac admitted they are not concerne with shareholders.  According to the article linked above, here’s how the discussion went down:

Mr. Ackman: So you can make decisions that are adverse to shareholders?
Mr. Rose: Correct.
Mr. Ackman: And there’s no liability to you?
Mr. Rose: Correct.

If I were a shareholder, I would convert all my common shares into puts or get out.

Haha, so just for fun, you wanna know how much $150 Billion is?  Well, since the Government is in the hole $150 billion (i know it’s way more, but i’m talking specifically about just this instance) to the taxpayers, let’s say they paid every taxpayer back for what they have borrowed from us.  Let’s assume the 300 million census count/estimate (and while I’m sure there are more people in the USA, i’m positive the number of taxpaying Americans is 300 million or less). If the government paid back what they owe the taxpayers on this one, that equates to $500 each.  Can I get a check please? Those mother fuckers are never going to give you anything for this, but it’s fun to dream! Sorry, got a little mad there 🙂