Anil

Fannie and Freddie: Let’s Call the Whole Thing Off

Sadly - This is true. Government is also engaging in deception by not nationalizing and informing tax payers of the obligations/bail outs assumed on behalf of citizens.

Fannie and Freddie: When the GSEs Go, So Goes the Dollar

BS Detector,

Although your analysis is good, it may contain one small flawed assumption. "The housing value of the assets will return to previous values". While this may come true in next 10 years, the NPV of those gains vs. cost of carrying these resources may not be attractive.

I guess it depends on what side is the bias. If we think that housing prices will return to their peak in next 3 years or so then your argument may have merit.

What are your thoughts?