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I don't think its a good idea but I think it's in the long run interest of the government/taxpayer to divest out of Fannie/Freddie. The current situation makes
by bko 1y ago
I don't think its a good idea but I think it's in the long run interest of the government/taxpayer to divest out of Fannie/Freddie. The current situation makes that impossible, so they'll have to take some kind of haircut. As the article discusses, one of the options is to screw over current investments (Ackman) and raise an IPO, although it would be impossible to raise enough to buy the government out at its current stake.
Of course the big caveat is that once private, the government needs to ensure another bailout is not possible.
- onlyrealcuzzo 1y ago> As the article discusses, one of the options is to screw over current investments (Ackman) and raise an IPO Ackman is not getting screwed. When the government essentially nationalized Fannie and Freddy, they made it clear that the stock in those companies was worthless. Ackman bought it, thinking his billions would be enough to lobby the government into zeroing out their share and handing him $600B. He's not getting screwed if they say, "you bought worthless stock, and it's still worthless, sorry."
- margalabargala 1y ago> He's not getting screwed if they say, "you bought worthless stock, and it's still worthless, sorry." Sure he is. He's just doing it to himself.
- TuringNYC 1y agoThey can divest out of Fannie/Freddie but we'll still have the liability, just as a shadow liability. Fannie/Freddie are Too Big to Fail, so the next time things get bad, we'lljust need to step back in.
- bormaj 1y agoWhat's the net benefit to the taxpayer/government for divesting from Fannie/Freddie?