The Wall Street journal has made another soviet styled propaganda attack on the private shareholders of Fannie and Freddie today. This time in an article by John Carney entitled “Time for Fannie and Freddie Investors To Surrender.”
The entire premise of his argument asks us to simply accept the 2012 third amendment sweep, where the government made a deal with the government, to sweep all of Fannie and Freddie’s profits to the government. John let me clue you in on something no one, but the government and those such as yourself who are serving as the official mouthpiece of the U.S. government are willing to accept the Soviet style profit sweep. When the sweep is deemed illegal than the entire basis for your article is no longer valid. But you know what John, I think you already know all of this, the purpose of your article was to wear down the will of those resisting these illegal government acts. You see John this is not the first time in history that this has been attempted, tactics like these were common by the state-owned press in the former Soviet Union.
Now we all know who was really behind this article none other than one Руперт Мердок (Rupert Murdoch). From now on we will refer to Rupert using the Russian spelling of his name. Руперт Мердок just because you have obviously surrendered any shred of principal long ago how dare you try and coerce the shareholders of Fannie and Freddie into doing the same. Just how warped you have become is evident in your quest to aid the U.S. government in this maniacal profit grab. You see unlike you Руперт Мердок money is not our God. We are fighting this fight to preserve our nation. If we lose this battle America will be forever changed.
I am now going to call for a boycott of all of Руперт Мердок publications.Anyone who continues to subscribe will be financing future propaganda attacks. Please tell them your reasons for canceling. I have pasted John Carney’s article below for reference.
I had hoped to post a deeper analysis of the opinion from last night, but this required immediate attention. I should get that up by tomorrow night. I want to commend our readers for some excellent comments today and the battles they waged on Twitter and the web, great work! NEVER SURRENDER and keep the Faith!
John Carney; 415-439-6400; John.Carney@wsj.com
Time for Fannie and Freddie Investors To Surrender
The fight over Fannie Mae FNMA -2.24% and Freddie Mac FMCC -2.74% profits should be over.
Freddie and Fannie have each reported profits for the second quarter that were much smaller than the record levels logged earlier, largely thanks to tax benefits and legal settlements tapering off. So there is far less at stake in the battle between the government and fund managers who own shares of the companies.
That spat has largely turned on the so-called sweep agreements the two companies entered into in 2012. Those require that after establishing a minimum net worth, all additional income must be handed over to the U.S. Treasury. In exchange, Uncle Sam agreed not to charge the companies a commitment fee on their government credit lines.
The fund managers argue that the government’s take should be limited to the 10% dividend owed on its preferred shares in the companies. The difference between the sweep and the 10% dividend was tens of billions of dollars last year—hence the attention.
Now it is far smaller. For Freddie, the difference is a rounding error. Under the sweep, it will pay $1.9 billion to the government. The 10% dividend on the preferred shares would be $1.8 billion. If Freddie owed a commitment fee for the credit line on top of that, it would likely be in deficit.
The difference is wider for Fannie. It is paying $3.7 billion to the government. A 10% dividend would be just $2.9 billion, an $800 million difference. But perhaps $250 million of that would likely go to any reasonable commitment fee on its $117.6 billion credit line.
Fannie’s chief said the second quarter gave a “good sense of a normalized environment,” suggesting these profit levels aren’t anomalous. And in this environment, sweep or no sweep, there is close to nothing left over for investors in Fannie or Freddie.