\nreleased in late January, the CBO projected that the AIG bailout would
\nultimately cost the Treasury $9 billion dollars. Indeed, the entire
\nprivate financial industry bailout is ultimately expected to cost less
\nthan $30 billion; of the $99 billion that the CBO expects we will
\nultimately lose on TARP, half of the loss comes not from helping the
\n“banksters”, but from the Obama administration’s decision to bail out
\nthe automakers. A further $20 billion will be spent on the Home
\nAffordable Mortgage Program, aka the administration’s mortgage
\nmodification plan. <\/p>\n
By contrast, the nationalization of the Government Sponsored Entities is expected<\/a> And that CBO report was issued before yesterday’s This is actually probably It’s looking increasingly like Fannie Mae and Freddie Mac are going to cost the US government much more than AIG. In its latest long-term budget outlook released in late January, the CBO projected that the AIG bailout would ultimately cost the Treasury $9 billion dollars. Indeed, the entire private financial industry bailout is ultimately expected […]<\/p>\n","protected":false},"author":80,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-308641","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/308641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=308641"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/308641\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=308641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=308641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=308641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nto cost the federal government $64 billion between 2011 and 2020, on
\ntop of the $110 billion we’ve already spent. Fannie and Freddie have
\nlong defended themselves on the grounds that their underwriting
\nstandards weren’t nearly as bad as those in the private sector. But
\nthey’ve certainly been better at socializing their losses; firms that
\ncontrolled maybe half of the mortgage market will end up costing the
\ntaxpayer four times as much as the other troubled financial
\ninstitutions. <\/p>\n
\nannouncement that due to an accounting change, Fannie and Freddie were
\ngoing to buy back<\/a>
\nmany of their non-performing mortgages rather than continue to make
\npayments to the investors. For those who haven’t been following along
\nat home, Fannie and Freddie guaranteed loans they packaged for resale,
\nwhich means when homeowners default, they have to make the payments.
\nThis is expensive, so Freddie and Fannie have decided to repurchase the loans. <\/p>\n
\ngood news for the taxpayer over the long run, because they’ll be
\nborrowing money to buy out the investors at lower interest rates than
\nthe interest rates on the non-performing loans for which they’re
\ncurrently covering the payments. But it raises some disturbing
\nquestions. First, why is an entity that is essentially an arm of the
\nU.S. government paying out extra cash in order to maintain some
\naccounting fiction? And second of all, how long before they have to do
\nthis again?
\n
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