Yesterday, we "invested" another $46 billion in Fannie Mae and Freddie Mac. I should not be so pissed-off at this point but I am.
The Treasury payout yesterday included a $15.2 billion investment in Fannie’s preferred stock and a $30.8 billion purchase of Freddie’s preferred shares, the companies said in separate filings to the Securities and Exchange Commission today. The companies must pay a minimum dividend of 10 percent.
It doesn't seem like we are dealing with this crisis "head-on". Why are we not winding down their operations? I am sorry I forgot we are using them to re-leverage the housing sector.
Do we have effective control over their board and CEO? This quasi-nationalized state does nothing to restore confidence and trust. Are Fannie and Freddie bondholders going to take a "haircut"? Or will that upset China?
I will try to find answers to these questions.