Monday, August 17, 2015

The Sneaky Path We Took To A Socialist Mortgage Market

The Sneaky Path We Took To A Socialist Mortgage Market

http://www.forbes.com/sites/jeffreydorfman/2015/08/17/the-sneaky-path-we-took-to-a-socialist-mortgage-market/

The federal government appears to have done two fraudulent things on the way to our current situation. First, they used false pretenses to take over Fannie and Freddie. Second, they pretended they were only temporarily providing financial stability. While the government took an ownership stake in return for its “bailout” (a trick it may have learned from Warren Buffett) , they allowed private shareholders to remain and have even sold some of the government’s shares on multiple occasions. However, unlike a truly private company, all profits of Fannie and Freddie are still being seized by the government for reasons which are unclear and possibly illegal.
Given that the government did not simply declare Fannie and Freddie defunct, but allowed private shareholders some hope (and even sold them shares), it seems the government created an expectation of future return to those shareholders. Yet, several years past the date when the government was paid back, it continues to deposit all profits into the Treasury, leaving investors high and dry. At least the way our government does it, socialism pays pretty well.

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