Fannie and Freddie. Socialized capitalism

Robert Reich

It’s another case of socialized capitalism, folks. The largest, yet. Along with making lots of money for investors and their executives, Fannie and Freddie corrupted our political process. They blocked any attempt to reign in the risks. Their lobbyists were and are the most sophisticated and among the most ubiquitous in Washington.

Part of the takeover terms was that F&F immediately stop all lobbying. Good.

The US markets are up, but not nearly as much as one might think. Among the reasons, many banks own large amount of F&F common and preferred stock, and the dividends were eliminated. Also, the bonds were not guaranteed, to the surprise of many.

Question: Did the Treasury government seize F&F or did they seize the Treasury?

This takeover is one of the biggest financial events ever. Seriously.

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