Monday, January 20, 2014

Fannie and Freddie NOT at fault for Great Recession

dgplexus1  Jun 3, 2013 10:22 AM Flag

Fannie and Freddie NOT at fault for Great Recession

See Wikipedia's entry, "Causes of the Great Recession."

Certain people were far too quick to point their fingers at the GSEs. The actual blame lies almost exclusively elsewhere.

If it's not broken, don't fix it. Fannie and Freddie wear the white hats, it turns out. They did everything above-board and in accordance with government directives. They were defrauded by big banks, and are recovering those losses, one bank at a time. Bank of America, General Electric, and Citigroup have settled already. Over a dozen remain.  It's looking great for Fannie and Freddie. Healthy, rapidly paying off Treasury debt, and exonerated.

As it turns out, Fannie and Freddie only needed an emergency credit line, not conservatorship. The government had directed them to hold low cash reserves. Fannie and Freddie rapidly repay their Treasury loans, and we get our companies back! Otherwise, the government loses in court for many reasons, including ENTRAPPING and INAPPROPRIATELY SEIZING these great companies, and blatantly violating the Takings Clause of the Fifth Amendment of the Constitution. The facts are on our side.

All of this really needs to be known by all concerned and involved parties. Shareholders, the conservator, Treasury, Congress, Obama, Ralph Nader, the hedge funds involved, journalists, and TV personalities who comment on Fannie and Freddie. The legal case for us is extremely strong, and when the facts are widely known, the political case will be, as well.

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