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Breakingviews: Uncle Sam’s morphine drip

Tuesday, April 02, 2013 - 03:08

April 2 - Rob Cox and Breakingviews columnists say Fannie Mae’s record annual profit is actually keeping a cash-strapped U.S. government from implementing housing market reforms.

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Well it's funny when profits actually dash expectations for reform -- that maybe what's happening with the US housing market. And housing finance and Agnes. We got Fannie -- come out with a seventeen point two billion dollar profit. Millions of dollars seven million of which was in the fourth quarter. Which makes it really hard to say -- We've got a problem here and a lot of this money's going straight treasure right right dividends I think much like two thirds of inherited -- that would treasure ships you know one of the things that we heard about we've been following it just that in this makes it a lot harder to actually reply when you have this this. You know basically -- a cash cow is making all this money to and it's not gonna continue at the housing market and -- The question I was able to get very quickly that the reason most the money is going to run -- railroad ties into the treasury is the Treasury's. Insisted upon that because that taxpayers of drip fed Fannie Mae and Freddie -- the 290 million dollars 190 billion off to the housing bust and giving your money back. You're right. But it says -- when will we talk about reform. What would we do to consider these out the bus in the boom here to keep the government off the hook. Either as a recipient or is -- you don't know what would. Just to start and I think what we -- -- -- before 2008 and Fannie Freddie. Not as big threatening they've basically Pakistan as they are housing they are out. But -- I mean. First stage is to just get them to pull back to where they work before 2008 at me but that would require someone else stepping in and right and this is the problem one -- -- -- as we've been very little political will to actually push that because it's going to be Massey and everybody's scared to do -- house. -- there's a very big question which should view -- people's dog which is it should the government be involved in. That hasn't look at the total offering guarantees that you need the UK just started doing. Little bit of this do you tell -- snow there this idea but even setting that aside evils that are evidence before the housing crisis even before the housing boom Fannie and Freddie. Disastrously flawed institutions -- terrible. Governance terrible scandals of the counting it'll kind of this sort of thing either usually are -- -- -- -- -- and our government in every sense even if you want the government involved. He should get rid of them certainly easily he's coming -- -- robust market. That would not really in favor of keeping Fannie and Freddie the problem is. Right now they are like a morphine drip for government that doesn't have any other and kept saying is -- there's actually no way for them. Payback for. And again that's by design because they don't want to go back because -- -- -- any kind of company but the problem is like. Two years basically in the situation. Where they're just gonna keep paying money to treasury. And nobody has a whole lot of political if you wanna think it's messy and there freighter or whatever they by the priority as we just basically now we have the status quo which. Fannie Freddie are the predominant. Players cannot. Treasuries are making money until the next can't count sorry. All right so I I assume already about this every corner that -- it will be back with more breaking news tomorrow.