Who Will Benefit From the Fannie/Freddie Windfall?
Posted at 10:43 a.m. on Feb. 21
Matthew Yglesias: “Post-bankruptcy Fannie Mae continues to be a publicly traded company, and various vulture funds own those shares. The shareholders’ preferred characterization of the situation is that the bailout Fannie received was a kind of loan and that these dividends constitute “paying back” the loan. When the “loan” is fully “paid off” the shareholders feel that they should have first claim on Fannie’s ongoing value as an enterprise.”
“The Treasury Department—rightly—entirely rejects this analysis.”
“Congress is going to do something about Fannie and Freddie eventually, and it is entirely within the power of Congress to “do something” that gives Fannie and Freddie shareholders an undeserved windfall. So watch out.”