January 3, 2014

IDEOLOGY VS COMMON SENSE:

Fannie Mae, Freddie Mac may be too profitable to shut down (Jim Puzzanghera, January 2, 2014,LA Times)

Fannie and Freddie are not only making money but also sending huge dividend checks to the Treasury -- a combined $39 billion this week for their latest quarterly payment -- and some are wondering why they should be put out of business.

"We're a country that's running huge deficits, and here are two government entities that are going to produce somewhere in the neighborhood of $40 billion to $50 billion a year for the government," said Guy Cecala, publisher of Inside Mortgage Finance Publications, which produces industry newsletters. "Can we really afford to kill off cash cows?"

Big payments from Fannie and Freddie this summer helped delay the deadline for raising the nation's debt limit. And with the latest dividend checks received Tuesday, Fannie and Freddie have paid the government a total of $185.3 billion since 2008, nearly offsetting the entire cost of the bailout.

Their turnaround has made the companies attractive to private investors.
Posted by at January 3, 2014 2:41 PM
  
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