Fannie (FNM) and Freddie (FRE) To Cost U.S. $400B, Wallison Says - Bloomberg
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Former Treasury general counsel Peter Wallison says that U.S. taxpayer losses on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) may amount to $400 billion before all is said and done, Bloomberg reports today.
Last week, the Treasury raised the funding caps, allowing the companies unlimited access to funds.
Wallison says that no one knows how much money will be needed to keep the companies solvent, and that they were too powerful to regulate.
The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said. He continues, “It was always safe to buy these notes. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”
Last week, the Treasury raised the funding caps, allowing the companies unlimited access to funds.
Wallison says that no one knows how much money will be needed to keep the companies solvent, and that they were too powerful to regulate.
The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said. He continues, “It was always safe to buy these notes. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”
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