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Kurr
1000+ Penny Miser Member
2906 Posts |
 Posted - 07/13/2008 : 11:58:27
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WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) -- As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.
The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."
FreedomWorks President Matt Kibbe commented, "The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries."
"A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors."
"A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics."
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The silver [is] mine, and the gold [is] mine, saith the LORD of hosts. Hag 2:8 [/b]
He created it. He controls it. He gave it to us for His use. Why did we turn from sound scriptural currency that PROTECTS us?
KJV Bible w/ Strong's Concordance: http://www.blueletterbible.org/
The book of The Hundreds: http://www.land.netonecom.net/tlp/ref/boh/bookOfTheHundreds_v4.1.pdf
The Two Republics: http://www.whitehorsemedia.com/docs/THE_TWO_REPUBLICS.pdf
Good reading: http://ecclesia.org/truth/government.html
A number of people are educated beyond, sometimes way beyond, their intelligence. - Tenbears
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 07/13/2008 : 21:29:01
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I agree other than the fact that it would kill the mortgage market going forward.
Ok we let fannie and Freddie go under because I think they did back the bonds.
So the government has to create some more GSE to do the mortgages. (no private capital is going to do it in this market to the size of Fannie and Freddie)
Are investors going to want to buy the bonds of the next GSE? Plus, Fannie and Freddie don't pay that much of treasuries. That difference between what the mortgage payor and GSE bonds pay is Fannie and Freddie's profit.
The government changed the game with these GSE and tax breaks for home ownership. They pushed up home prices to help people spend/build net worth. Now if they changed the rules back... to many people would feel the hurt. Then those in government would be out of work.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Chinese Government is Top Foreign Holder of Fannie
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