Monday, September 8, 2014

TRUTH of Fannie Mae FNMA conservatorship

iamj_1  1 hour 53 minutes ago Flag

My Response to a Comment Following the Market Watch Article in the Summary Section

Robert Laden,
There are many people better at explaining this to you than me. But, frankly you do not understand what has been going on with FNMA for the last several years.

FNMA does not pay a 10% dividend to taxpayers. What has happened is that 100% of the profits from FNMA are going directly to the treasury, and where the money goes from there is not known. This has been called "The Sweep," and it is wrong on many levels. Treasury unilaterally, essentially, declared that the 10% dividend was cancelled and that all profits were to go to them. At this point, more than about $20 billion above the amount of money loaned to FNMA has gone to the Treasury. I believe that the current number exceeds $200 Billion. No other company that was loaned money by the Government has been stolen from like this. FNMA is STILL a public traded corporation.

Why is this wrong? If you care about the Rule of Law in this Country, this should disturb you on a Grand Scale. This violates the "Takings Clause" of the United States Constitution. As a citizen, I care more about the Constitution being upheld than getting a 10% dividend. If we allow the GOVT to do this to one corporation, this can happen to ANY corporation that the GOVT wants, or "needs," to take over. Secondly, FNMA (and Freddie Mac) are being held in Conservatorship even though they are doing well and profitable. The GOVT is not allowing the companies to recapitalize and this puts the U.S. taxpayer at a huge risk if a crisis comes to pass in the future, because there will not be any money to absorb the losses that are certain to occur. Where is that money? See Sweep above. Is it right for a conservator to not allow a company to be free once it is financially healthy? Is this the kind of power you want to cede to the GOVT, so that you can get 10% of what is, in the big picture, not a lot of benefit? There is a lot more at stake than just the future of FNMA and Freddie Mac when you extrapolate the potential tyrannical effects this could have on ANY United States corporation, or individual, for that matter.

Lastly, you comment about "Vulture Funds" owning all the stock. You are terribly wrong about that. A great deal of the stock is held by individual citizens like me who believe in the Rule of Law of the United States and we trust that the right thing will be done and that ultimately, FNMA will be set free. Without a doubt, this is a risky proposition. But, I, like many other Americans who believe in the importance of FNMA and Freddie Mac, believe that justice will prevail. Retirement Funds have traditionally held the stock, as well. Do you really believe that it is right for the GOVT to come in and steal the dividends that belong to shareholders and to devalue the stock by a continued state of Conservatorship and by sweeping all the profits?

In conclusion, whatever you feel about the GSE's and their right to exist, the corporations must be set free and then whatever happens to them in the market must be allowed to happen. To do otherwise is to support tyranny, and the right of the GOVT to take over or nationalize any corporation that they feel will benefit them. We, as citizens, cannot allow this or tolerate this.

Good luck to you and to all the Shareholders in FNMA!

IAmJ_1

3 comments:

  1. Awesome forceful article!!!

    ReplyDelete
  2. couldn't have said better, where have our rights gone to succeed in this country

    ReplyDelete

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