Fannie and Freddie Reverse Bailout Empowers Politicians to do Nothing

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How convenient for the politicians. The rate that Fannie and Freddie, now making money, are paying back the government, the $190 billion bailout will be paid back in no time. Fannie’s unexpectedly large payment to the Treasury gives politicians until Labor Day to avoid solving the sequester and budget problems. Check out the following 3 stories. The logjam lives on!  BC

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Lew Says Fannie Mae Delays U.S. Debt Limit Until September (2) – By Jennifer Ryan – U.S. Treasury Secretary Jacob J. Lew said a one-time payment from Fannie Mae confirms that the nation’s debt ceiling won’t be reached until September. “The one-time payment that Fannie Mae has announced makes it very clear that we’re not going to hit the effective deadline until at least Labor Day,” … Fannie Mae, … said yesterday it will pay the Treasury $59.4 billion after reporting a record quarterly profit driven by rising home prices and declining delinquencies. – Businessweek

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Lew says Fannie Mae payment helps delay debt limit until Labor Day – By Jim Puzzanghera – A nearly $60-billion dividend payment to the government by taxpayer-owned Fannie Mae will help push off the effective date on which the U.S. would hit its debt limit until at least Labor Day, Treasury Secretary Jacob J. Lew said Friday. – LA Times

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Fannie, Freddie, Zombie – By JIM MCTAGUE – The two profitable mortgage outfits will be the walking dead if the government takes their profits for another 10 years. An IPO? – Here’s the financial equivalent of the popular Twilight vampire franchise: Politicians are sucking the blood out of resurgent mortgage guarantors Fannie Mae and Freddie Mac rather than returning them in good health to the private sector, where they belong. Washington is using their money in its budget-cap games, leaving the duo in a state of perpetual weakness, like the living dead, imprisoned in the government’s ill-named “conservatorship” program. – Barron’s

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