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Obama Admin Gives Unlimited Aid to Fannie and Freddie

This was an unwelcome Christmas gift to all taxpayers. The Demrats pulled another fast one in the middle of the Christmas holiday so the news coverage would be light.
(AP) The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.

The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government's estimate this summer of $170 billion over 10 years.

Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Under the formula, financial support would increase according to how much each firm loses in a quarter. The cap in place at the end of 2012 would apply thereafter.

By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress.

While most analysts say the companies are unlikely to use the full $400 billion, Treasury officials said they decided to lift the caps to eliminate any uncertainty among investors about the government's commitments. But the timing of the announcement on a traditionally slow news day raised eyebrows.

"The companies are nowhere close to using the $400 billion they had before, so why do this now?" said Bert Ely, a banking consultant in Alexandria, Va. "It's possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets."

How's this hoax and chains working out for you?
It's rather pitiful that they should think that the entire economy depends on if the 'investors' think free money from the government will dry up... Perhaps it does.

...We may end up seeing a welfare state, not concerned with the welfare of the people, but an economic welfare state... Where the economy is entirely dependent upon government support, and only becomes more so over time.
jwellsy wrote:
How's this hoax and chains working out for you?
Well, perhaps they can argue that the trillions they stand to gain from the Medical Health Reform legislation in four years time, would make these few billions trivial! I'm amazed that the hoax attracted so little media coverage though. I'm beginning to think that perhaps what interests the media Government wise, has to be motivated by Government in some or other deal or pay-off? If Government can make deals with Nebraska so that they can get their Senate vote in legislation, I imagine they can do similar deals with the media all the time? Evil or Very Mad
A moral hazard at its best.
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