Monday, January 4

one more thing about 2009

What were you doing on Christmas Eve? Hanging out by the fire, opening presents, sipping an adult beverage, spending quality time with family and loved ones?

The criminals in Congress, on the other hand, on Christmas Eve, were busy lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. Thanks, Santa!

From WSJ:

"The government wants taxpayers to think that these are profit-seeking companies being nursed back to health, like AIG. But at least AIG is trying to make money. Fan and Fred are now designed to lose money, transferring wealth from renters and homeowners to overextended borrowers.

"Even better for the political class, much of this is being done off the government books. The White House budget office still doesn't fully account for Fannie and Freddie's spending as federal outlays, though Washington controls the companies. Nor does it include as part of the national debt the $5 trillion in mortgages—half the market—that the companies either own or guarantee. The companies have become Washington's ultimate off-balance-sheet vehicles, the political equivalent of Citigroup's SIVs, that are being used to subsidize and nationalize mortgage finance."

Their timing was all-too perfect, too. Had they not acted before 12.31.09, the Congress would have been needed to sign off on the exposure past $400 billion. This way, the Treasury Department has a permanent lock on the conservatorship of FM/FM, it helps them keep Democrats in Congress, risk taking increases again and Obama can count on the housing bubble blowing up again.

Best of all? Freddie and Fannie are immune from the TARP rules, but Freddie's HR director makes $2.7 million a year! How great is that?

And lest we forget, Senator Chris Dodd (D-CT) and Rep. Barney Frank (D-MA), the two jerks behind this entire mess who prevented GOP-led reform a decade ago, should still be in jail, by the way.


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