07 August 2013 (12:20 UTC-07 Tango)/30 Ramadan 1434/16 Mordad 1391/01 Geng-Shen (7th month) 4711
“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag.”-Barack Obama, misleading a group of 2000 people in Arizona
What’s wrong with the above statement? It suggests that Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) were bailed out by taxpayers because they’re pseudo-governmental agencies, and if Fannie Mae and Freddie Mac were fully privatize, taxpayers would be spared. But wait, what about all those fully privatized banks that got bailed out by taxpayers?
Did you forget Bears Stearn? That fully privatized company got bailed out by the government when it got into trouble with its mortgage securities, then sold to JP Morgan.
Did you forget Goldman Sachs? That fully privatized company got ‘bailed out’ by the government’s TARP in 2008, even though the company reported big profits from mortgages in 2007!
Did you forget Citigroup? This fully privatized company got into trouble with the subprime mortgage crisis (by the way, the crisis was created by the banks themselves) and ended up getting bailed out by the government!
Did you forget the Emergency Economic Stabilization Act of 2008, meant to bail out fully privatized banks due to the mortgage crisis? Obama voted for it as a Senator!
Did you forget AIG? Barack Obama, himself, voted for a taxpayer bailout of the fully privatized company as a Senator, even though he knew the company was ripping people off: “How do they justify this outrage to the taxpayers who are keeping the company afloat?”
Did you forget Bank of America (BoA)? This fully privatized company got $25 billion in TARP bail out money in 2008, and another $20 billion in TARP money in January 2009, then another $5.2 billion in March 2009! The last government bail out was snuck through AIG to BoA. In 2010, BoA agreed to pay a $137 million fine for defrauding schools, hospitals, and dozens of state and local government organizations. In 2012, BoA was accused of running a scam called Hustle or High Speed Swim Lane. The scam cost U.S. taxpayers more than $1 billion because BoA sold fraudulent mortgages to Fannie Mae and Freddie Mac! Arizona‘s attorney general says BoA “repeatedly has deceived” mortgagors! August 2013, U.S. Justice Department and the U.S. Securities and Exchange Commission accuse BoA of investor fraud in the sale of $850 million of residential mortgage backed securities!
And Obama wants to sell off Fannie Mae and Freddie Mac, because he thinks they’re a threat to taxpayers?!
By the way, Freddie Mac just posted a $5 billion profit for its second quarter this year!
Oh, the other bogus reason Obama gave is that the housing market has recovered. Wrong! He stated that home prices are going up. Correct. Several surveys show that home prices are up because of house flippers. That’s a cutesie phrase for home speculators. They buy up a house with the expectation that they can sell six months to a couple of years later at a profit. That is not a sign of a true housing recovery. When you get a big increase in families buying homes to live in for 20+ years, that’s a sign of recovery, and that is not happening. (in fact many families trying to buy homes are reporting being out bid by house flippers)