> But in fact, the way they work is that every time their net worth increases, the government’s senior preferred claim — that $348.4 billion — increases by the same amount. So if they earn $30 billion this year, the government’s claim will increase to $378.4 billion, and the shareholders will be no closer to getting paid than they are now.
jaybrendansmith 179 days ago [-]
Ok great. So probable outcomes: 1) Mortgage rates will go up by .5%, because these privatized corporations will no longer have the automatic full backing of the government. 2) Lending will become inequitable, because with profit motive, these institutions will operate more like a bank, with income and racial profiling, 3) Without the federal backstop, we open the doors to another 2008 financial crisis, 4) Housing affordability becomes a slave to the market, becoming cheap during economic booms, tight and expensive during downturns. And the fruits of the IPO will go primarily to tax cuts for billionaires. Not seeing a lot of upside here, folks. Seems like a war on the American people.
DeepYogurt 180 days ago [-]
Housing bout to get wild
rwbt 180 days ago [-]
How exactly?
jedberg 180 days ago [-]
Fannie and Freddie are supposed to be there to stabilizing home lending rates. If they are public and have a profit motive, then their mission changes to profitability over stability.
UncleOxidant 180 days ago [-]
Weren't they public before the '08 GFC?
stonogo 180 days ago [-]
Yep. How'd that work out?
jedberg 180 days ago [-]
Yes. But their mission was still stability. This time around my understanding is that their charter will change.
180 days ago [-]
swarnie 180 days ago [-]
Coupled with a new Fed chair this is going to be rocket fuel to the housing market. Try not to be the one holding this editions Bear Stearns at the end.
Why no chuck Klarna a banking charter and an IPO while were at it?
bananapub 180 days ago [-]
that's old thinking, the new thinking is just make it irrelevant if you're a bank or not (see "shadow banking") and let you do whatever.
another good example - a company is offering national sports betting, in violation of the laws of almost every state, by pretending it's actually selling futures contracts, which a weird old federal law claims are solely under the jurisdiction of the feds.
idiotsecant 180 days ago [-]
US speed running the fall of rome.
r0ckarong 180 days ago [-]
It's 2008 all over again.
honeybadger1 180 days ago [-]
I'm not sure I see this as a problem within itself. I am actually quite interested in seeing someone do something different because it's only been getting worse.
180 days ago [-]
Rendered at 00:16:29 GMT+0000 (Coordinated Universal Time) with Vercel.
https://archive.ph/XHuGW
> But in fact, the way they work is that every time their net worth increases, the government’s senior preferred claim — that $348.4 billion — increases by the same amount. So if they earn $30 billion this year, the government’s claim will increase to $378.4 billion, and the shareholders will be no closer to getting paid than they are now.
Why no chuck Klarna a banking charter and an IPO while were at it?
another good example - a company is offering national sports betting, in violation of the laws of almost every state, by pretending it's actually selling futures contracts, which a weird old federal law claims are solely under the jurisdiction of the feds.