Fannie and Freddie will report second quarter earnings later this month. It's a safe bet that lower rates will translate into some large hedging marks...
The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter...
The robust second quarter brought year-to-date agency MBS issuance to $562.02 billion, just 1.3% below the level reached in the first six months of last year.
As of January 2019, Fannie employed 7,400 people compared with 7,200 a year earlier, according to 10-K filings with the Securities and Exchange Commission. There was no mention of the word “buyout” or “buyouts” in the SEC filing.
We understand from informed sources that paying off Fannie/Freddie shareholders (the ones suing Uncle Sam) is calculation that certain federal officials have entertained.
FHFA Director Mark Calabria on Bob Ryan: “Bob’s advice and counsel during my transition have been invaluable. I greatly appreciate his service at FHFA during the past five years and his role in helping ensure liquidity and funding for the nation’s housing finance system...”
Former Fannie Mae CFO Tim Howard says there is no economic reason the GSEs should hold capital comparable to large commercial banks. “Fannie and Freddie are not multi-product and multinational lenders. They are mono-line insurance companies, limited to a single asset type – residential mortgages – whose historical credit loss performance has been dramatically better than banks.”
How do you get out of a debt bubble? Answer: Raise taxes and cut spending, something U.S. politicians have been loath to do. Or you could print more money...
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