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"Under the terms of their 2008 conservatorships, [Fannie and Freddie] currently have access to more than $250 billion in support from the Treasury Department."
by chernevik 5y ago
"Under the terms of their 2008 conservatorships, [Fannie and Freddie] currently have access to more than $250 billion in support from the Treasury Department."
These institutions and their Federal guarantees contributed enormously to the 2008 housing bubble and subsequent collapse. But 13 years later, here they are, allocating credit. What could go wrong?
- defaultprimate 5y agoIt's gonna be glorious
- Arrath 5y agoGet it while you can!
- rich_sasha 5y agoIIRC, these two did exactly what they are supposed to. They always had implied backing of the government, meaning basically this. The issue was actually mortgages not backed by either of these, which however were still securitised and traded as if they were. When housing market slowed, evictions and defaults mounted, investors in FDIC et al were fine, the mortgages were backed. It was all the other ones that went to 0 and caused the all-planet financial meltdown. So if anything it’s good to see that the credit expansion is going through these entities.
- chernevik 5y agoInvestors in their securities didn't ask whether the supporting collateral was inflated because they didn't have to. And because the GSEs made up the bulk of the market, it was their willingness to lend that drove that market. Their expansion of excess credit (along with the Fed's constant easing) lead to the bubble in housing prices that drove the whole thing.