Fannie & Freddie: Buying friends in D.C.

[jannyk]

Source: CNN

>>The two mortgage finance companies doled out $174-million over the past 10 years to Washington lobbyists, report says.

"They tied up almost every lobbying firm in Washington, whether they used them or not, over the past several years," said Joshua Rosner, a financial analyst with Graham Fisher & Co. and long-time critic of both companies.

"We had the Keating Five," said Rosner, referring to McCain and four other senators who had supported the head of the failed Lincoln Savings and Loan Association nearly 20 years ago.

"This is closer to the Keating 535," added Rosner referring to all members of Congress. "Those legislators who have cost shareholders, preferred shareholders and taxpayers potentially hundreds of billions of dollars, I think we ought to hold them accountable."

Read more: http://money.cnn.com/2008/09/08/news/companies/fan_fred_buying/?postversion=2008090908

---

Oy vey!

[One_Life_To_Give]

1. How many retirement portfolio's are based on Fannie & Freddie

I believe this bailout has more to do with the millions of retire's and workers who's pensions and/or 401K's, 403B's are heavily invested in these two. Who have been piched to investors both small and large instituitions as Solid and Reliable like buying savings bonds only better.

As painful as bailing them out may be. The alternative of letting all those retirement and pension funds be wiped out might actually be worse.

[slackmaster]

2. That is basically my take on it too

Because both institutions are federally chartered and the long history of Fannie Mae before it was privatized (1938 - 1968 IIRC) there has always been a perception that their securities are backed by the full faith and credit of the federal government. That is at odds with the way they are actually structured, but allowing them to fail would do serious damage to the financial reputation of the USA.

They have turned out to be not such great investments for people who can't tolerate risk, but the government really can't let them go under.

[Javaman]

3. This is what I have been saying in another thread and I got flamed for it...

everyone in the other thread thinks that this "nationalization" will help out people who can't otherwise invest in a house and by not nationalizing will only allow the rich to own houses.

Makes me crazy. This has always been about a giant give away for the rich investors.

fanny and freddy were established by the FDR admin to allow people to buy homes, over time it became a complete bastardization of that concept and became a rich mans investment vehicle at the cost of the small home buyer.

the small home buyers have already been screwed to the wall via the subprime mess and there are virtually no more small investors to help out with this "buy out plan", it's all the rich making back money from failed hedge funds that were trenched.

It really drives me nuts way no one sees the obvious.

this helps out the rich and destroys yet another new deal points. the repukes are laughing their asses off at us.

[slackmaster]

4. Nit: Fannie was established during the FDR admin

Freddie came to being when Nixon was in office.

[One_Life_To_Give]

5. Bankrupting State Pensions will hurt the little guy

A number of those "Rich Investors" are instituitions like State and Teacher Pension Boards. This fund goes bust and you will have long term government empoyees who's entire retirement/pension has been wiped out. This will make the Enron pension/retirement collapse seem like a triviality in terms of the millions of people affected.

[Javaman]

7. yes, they were also the same ones that took on high risk investments aka hedge funds

by less than qualified people making those investments. Like everyone during the boom times, they wanted quick money. Believe me, I have read the nightmare stories.

Then instead of bailing out the macs like I have said all along, help out the home owners and perhaps now, the various retirement funds. It should all be done on a case by case situation. I posted this in another thread.

doing a blanket "bailout" or "nationalization" opens up this whole mess to all sorts of corruption. Many many corps and private investors are going to making out like bandits from this and are going to quietly put all their "winnings" in off shore accounts.

This whole think just plane reeks.

[Trillo]

9. I think this argument can be made about a lot of different things

"over time it became a complete bastardization of that concept and became a rich mans investment vehicle"

Everything financial has evidently become tied into each other, except for human citizens, who cannot even deduct expenses related to getting to work (as but one small example).

Its very discouraging that no matter how hard somebody works to keep their head above water, it ends up that some nameless suits sitting in some boardrooms have figured out how to keep most of that labor from being worth anything substantial while they make out like the bandits they are, using their high flying educations to transfer the value of citizens labor into their own wallets, executives in possession of their truly golden parachutes that pay exorbitant sums at termination. The severance pay of Fannie and Freddie's former executives is truly disgusting, reportedly millions of dollars!

If only the rest of us could get paid for failing!

I think the most important thing we can do is work to eliminate corporate personhood, and to insure our elections are honest so the leaders we have really are elected by a majority of us.

[Javaman]

10. Eliminating corporate personhood would solve a great deal of our

nations problems when it comes to the over reach of their quasi-fascist control of the government.

[Bob Dobbs]

6. Shareholders lose everything in the bailout ANYWAY.

Only the central banks that own MORTGAGE SECURITIES get bailed out, the stock holders are WIPED OUT.

See the real story here: http://www.counterpunch.org/whitney09082008.html

[Javaman]

8. up the small time investors are the ones going to take it on the chin. nt

[Trillo]

11. A sobering quote from your link:

The richest 1 per cent of the population receive 57.5 per cent of all the income generated by wealth – that is, payment for privilege, most of it inherited. These returns – interest, rent and capital gains – are not primarily a return for enterprise. They are pure inertia, weighing down markets. They do not “free” markets, except by providing a free lunch to the wealthiest families. The richest 20 per cent of the population receives some 86 per cent of all this income – that is, what actually is increasing household balance sheets.

What people still view as an economic democracy is turning into a financial oligarchy. Politicians are looking for campaign support mainly from this oligarchy because that is where the money is. So they talk about a happy-face economy to appeal to American optimism, while being quite pragmatic in knowing who to serve if they want to get ahead and not be blackballed.

---

I wonder if we will ever move from happy face versus pragmatism, from lies to truth.