$FNMA $FMCC The Housing and Urban Development Act of 1968 was transparent and enacted through legislation. But that doesn’t erase a parallel with Enron’s strategy: moving obligations off the balance sheet and understating risk. The legal methods were very different, but removing Fannie Mae’s obligations from the federal budget was part of the rationale for its privatization. What emerged was hardly an ordinary private company. Fannie Mae’s leadership included prominent political insiders (mostly democrats) who collected substantial private-sector compensation, while the company benefited from government privileges that weakened market discipline. Those privileges included access to a Treasury line of credit, exemptions from securities registration requirements, and diminished reporting requirements on internal operations that applied to ordinary public companies. The arrangement was politically convenient: Fannie Mae could continue serving public-policy goals while its obligations remained outside the federal budget. Calling that a private-capital model glosses over how much the model depended on its government relationship. Yes, the model is flawed, and it’s hard for me to imagine guardrails or reforms that would resolve its fundamental contradictions. If it depends on a sovereign backstop to function, calling it a private-capital model obscures how much of the risk ultimately rests with taxpayers. Private investors can supply capital, but that doesn’t make the government’s support disappear. In my view, it should be wholly government-owned. We’ve discussed guarantee fees and mortgage rates before. A wholly government-owned entity could potentially charge lower guarantee fees because it wouldn’t need to deliver private shareholders’ required returns and could operate under a different capital framework. The underlying credit risk would still need to be covered, but eliminating the private profit requirement could reduce fees. How much of that reduction would reach borrowers through lower mortgage rates is a separate question. If this ends up the path we go down, shareholders would ultimately get bought out (how coercive that process would be, remains to be seen)

$FNMA $FMCC In these days of financial repression and what are still historically very low rates, its important to keep in mind what returns were over the period under discussion:

$FMCC $FMCC Guys I want to pay tribute to Bill Ackman.. A TRUE AMERICAN HERO!!! Bravely agreeing to put his portfolio between America and AOC!!!!! What a complete crock of shit...You'd really think that the last line of defense against the Democrats is Bill Ackman’s cost basis...Under no circumstances can we let affordable housing fall into the hands of people who, well, campaign on affordable housing and instead we will remove politics from FNMA before the other guys get control! Really glad to hear that Bill Ackman is willing to accept enormous personal profits to prevent this national tragedy! This couldn't be more transparent...But apparently there's no shortage of those here who are taking it at face value!! @Wize_Markets how do you foresee the "weaponization" going down???