Friday, February 21, 2014

With Fannie and Freddie Debt Repaid to Taxpayers

With Fannie and Freddie Debt Repaid to Taxpayers, Will Uncle Sam Turn Shareholders Into Zombie Investors?

With the Treasury set to recoup its entire investment and then some, one would expect that the firms would be ready to exit government control and begin repaying their investors—more than 21,000 of them. But the near record windfall is for now mostly symbolic, as the government had re-engineered the original agreement to require the GSEs to send all their profits to the Treasury in perpetuity, meaning they can never exit government control.

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