Govt. likely to quasi-nationalization Fannie and Freddie

[DogPoundPup]

NEW YORK - The U.S. Treasury is growing increasingly likely to recapitalize Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) in the months ahead on the taxpayer's dime, Barron's reported in its August 18 edition.

The weekly financial newspaper said that such a move could wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.

An insider in the Bush administration told Barron's that Fannie and Freddie "are being jawboned" by the Treasury Department and their new regulator, the Federal Housing Finance Agency (FHFA), to raise more equity.

But government officials don't expect the agencies to succeed, Barron's reported.

If the government-sponsored enterprises fail to raise fresh capital, the administration is likely to mount its own recapitalization, with Treasury infusing taxpayer money into the agencies, according to the Barron's source.
http://rawstory.com/news/2008/U.S._likely_to_recapitalize_Fannie_Freddie_0817.html

Any of you have any extra $$$'s to shoulder this REPUBLICAN MADE burden on top of all the other CON made disasters?

[Demeter]

1. This Disaster Had Many Fathers

Democratic hands are not clean, either.

[PSPS]

2. "Quasi-nationalize" = Open another funnel from the treasury to bush and his cronies.

[JDPriestly]

3. You mean re-quasi-nationalize.

Fannie Mae was founded as a government agency in 1938 as part of Franklin Delano Roosevelt's New Deal to provide liquidity to the mortgage market. For the next 30 years, Fannie Mae held a virtual monopoly on the secondary mortgage market in the United States.

In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation.<2> Fannie Mae ceased to be the guarantor of government-issued mortgages, and that responsibility was transferred to the new Government National Mortgage Association (Ginnie Mae).

http://en.wikipedia.org/wiki/Federal_National_Mortgage_Association

From 1938 to 1968, the secondary mortgage market in the United States was monopolized by the Federal National Mortgage Association (Fannie Mae), which was a government agency during that period. In 1968, to help balance the federal budget, part of Fannie Mae was converted to a private corporation. To provide competition in the secondary mortgage market, and to end Fannie Mae's monopoly, Congress chartered Freddie Mac as a private corporation.

http://en.wikipedia.org/wiki/Freddie_Mac

Freddie Mac was conceived as a private corporation -- but received a lot of help from the government. Fannie Mae was a government entity. Privatizing it did not work. There are some things that government does better than private business. And running Fannie Mae and Freddie Mac are two such things.