Johnc222

Fannie and Freddie: Sticking it to the Taxpayers

Value, it depends on how you define it..The desirability of worth of a thing.

Well, since FRE/FNM held most of America's mortgages in some form or another at the bottom of the housing crisis, the WORTH was savagely compromised. Now, that the Economy is turning up and most consensus would state that the Recession is over. You would natural conclude that the WORTH of FRE/FNM holdings would also increase in value.

FRE/FNM hold Trillion of dollars in assets (approx. 5.6 T) not billion, but Trillion alot of that was taken on the books at distressed levels. When the MBS membership was leverage 40X and recieved their Margin calls. The GSE step in and bought therefore supporting the market, that the Banks had destroyed.

Those destressed assets are now starting to rise in value. FRE with it's trillions dollar portfolio will have more then the 56 billion in worth to pay off the Government.

So, once again most of the analysis subscribed to the GSE was done at the bottom of the Market. Wait one more quarter or two and re-examined your math,...then tell me the GSE have no Value.-johnc222....Happy Labor Day...folks