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Obama's Treasury Department Lifts Bailout Caps on Fannie and Freddie

The administration made its announcement on Christmas Eve night. Transparency, baby!

We knew all along that Fannie and Freddie are nothing but arms of the US government. Obama's action is just acknowledging this and making it official. Unfortunately, it will squeeze private industry out of the housing financial system, putting most Americans in the position of having to go to the government to get a home loan. The elimination of the bailout caps means that many people who don't have the means of paying back a home loan will get them, too. Joe Weisenthal has an article at The Business Insider in which he provides analysis from Edwart Pinto on the ramifications of this move.

The conclusion:

The above actions would preserve and strengthen the government's involvement and control over the country's housing finance system and make it harder to reintroduce substantial private sector involvement later on. They would also continue distortions in the marketplace leading to who knows what unintended consequences. Finally these steps would do nothing to deleverage the housing finance system, a key step in returning it to any degree of normality.

The first commenter at the article made this disturbing observation:

I live in Beijing and am shocked to realize that the US housing system is now far more Socialist than China's.

This makes me think of the young woman in the YouTube video who said that with Obama as president she won't have to worry about paying her mortgage anymore. At the time I thought she was the idiot, but it seems she was right all along and the American taxpayers are the chumps.

First Obama and the Dems nationalized the student loan system. Now the housing loan system. Next, the health care system. Welcome to the New America, where the government is front and center in virtually every aspect of your life.


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Comments (8)

Greetings COMRADE!... (Below threshold)
GarandFan:

Greetings COMRADE!

This socialist bastard is going to be thrown out of office. Unfortunately, we have to wait for 3 more years.

Three years to throw him ou... (Below threshold)
LiberalNightmare:

Three years to throw him out of office -

20 years to undo the damage.

Barry's one upping the Chai... (Below threshold)
914:

Barry's one upping the Chairman!

I remember when "those of h... (Below threshold)
DaveD:

I remember when "those of higher intellect" made fun of Palin during the campaign because she stated these entities would cost the taxpayers too much money. The snobs of both parties said nonsense, FannieMae and FreddieMac are run like private corporations. If taxpayers are slated to foot the bill for the debt incurred, then they are public entities, period. FannieMae and FreddieMac were integral in aiding the real estate/economic meltdown of 2008. It appears since Bush unfairly got the blame for Democrat unwillingness to assist in the reform of these entities, Barry figures it's OK to reprise this felony. Guess he's feelin' lucky after that incredibly popular healthcare plan he helped guide through Congress.

"Obama's Treasury Departmen... (Below threshold)
914:

"Obama's Treasury Department Lifts Bailout Caps on Fannie and Freddie"

This is all so Dodd,Rahm, Nelson and Lurch can open a new chain of Barney and Frank's salon's of sodomy..

Thus the Second American Wa... (Below threshold)

Thus the Second American War of Independence took another lurch toward its hot phase!

While, meanwhile, someone suggested we could, in twenty years, rid ourselves of the damage DC's fascists are doing.

Just, I guess, as we took only twenty years, every time, to rid ourselves of the damage done by just the past 80 years of effectively treasonous, fellow-traveling and/or usefully-idiotic and absolutely un-and-anti-American "Democrats?"

We will either sack the incumbent congress and have the colonial-British/Indonesian pretender to what passes for the presidency impeached -- and off to prison -- or our beloved fraternal republic and the very Judeo-Christian/Western/Human Civilization we have long vanguarded will be lost -- and Mankind will be headed into a New Dark Age. One from which it is unlikely to ever emerge!

Just proves a point I do no... (Below threshold)
hcddbz:

Just proves a point I do not know why progressives are upset with Barry?
The executive branch is giving them every thing they want without congress.
now when will the Domestic peace force EO occur so that Barry can maintain order in his Third Kingdom.

And the Fannie and Freddie ... (Below threshold)
Les Nessman:

And the Fannie and Freddie execs continue to get huge payoffs.

The Washington Post:
"But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.

The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac's chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so. "




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