Option To Shut Down Fannie, Freddie Discussed By OMB
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The Office of Management and Budget (OMB) says Options for Fannie, Freddie May Include 'Wind-Down'.
Options for overhauling Fannie Mae and Freddie Mac, the government-run mortgage-finance companies, may eventually include liquidating their assets, according to a document released today by the Obama administration.Shutting Down Fannie and Freddie is the only option worth discussing. The focus should be on how, rather than if.
The Office of Management and Budget also projected today that the companies, which have received or requested $78.8 billion in aid since their federal takeover in September, will need at least $92.2 billion more by Sept. 30. The Treasury Department doubled an emergency capital commitment for each company in February to $200 billion.
Alternatives under consideration range from “a gradual wind-down of their operations and liquidation of their assets,” to returning the two companies to their previous status as government-sponsored enterprises that seek to maximize shareholder returns while pursuing public-policy goals, according to the document released by the OMB.
In the meantime, please note that the taxpayer bill is up to $171 billion and counting from $78.8 billion. Does remember the lie that taxpayers would not lose a dime on this? The sooner that Fannie and Freddie are shut down, the better off everyone will be.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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