Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds

$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals According to FreedomWorks Analysts

Last update: 11:08 a.m. EDT July 11, 2008

WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) -- As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.

The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."

FreedomWorks President Matt Kibbe commented, "The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries."

"A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors."

"A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics."

SOURCE: FreedomWorks

FreedomWorks
Adam Brandon, 202-942-7612
abrandon@freedomworks.org

Copyright Business Wire 2008

Fannie and Freddie Doubled Today. Takes Balls!

One man's poverty is another man's prosperity.

Bravo to to those who made money today. Your fearless took balls, and you deserve every penny of your reward. You have inspired many!

On the other hand, all of that money represented in the loss of market value has now returned into the economy. Inflation will follow.



But, what is really going on here?

We are being told that FRE and FNM own approximately $5 trillion in mortgages.
We see that market capitalization amounts to aprox. $15 billion.
We also know that, at say, an average of 6% interest, FRE and FNM are expected to earn $300 billion this year.

Alan Greenspan: THE AGE OF TURBULENCE - Commentary

"In my study of Alan Greenspan I see that the cosmopolitan world is obsessed with growth especially growth in interest rates which in effect is usury. I see Mr. Greenspan as seeking the balance which I feel is much more important as in the human body; as in the basic household and in every higher sphere. Growth like a cancer can rapidly destroy an organism unless it is considered a healthy form of growth. After a certain point all organisms age and growth begins to decline. It is the same with all entities. That is why it becomes increasingly necessary for the nations to grow as a global unit finding the balance instead of clutching separatist and isolated realms controlled and stifled by the limitations of emotionally and traditionally driven populist agenda." —Wildfeather


My Recent Amazon Commentary:

"In view of the turbulence of the twentieth century, one may find it easy to embrace conspiracy theories of government, banking and nefarious systems of world domination. But, perhaps there are other less understood factors which may account for the events of our recent history. One hundred fifty pages into Mr. Greenspan’s classic work, “The Age of Turbulence”, I now find that I must shift my thinking. Mr. Greenspan may well be the Thucydides of this age. In reconstructing detailed summaries of scores of important events in the modern history of the United States, he gives clear instructions and definition regarding the financial behavior of our people and our markets. His explanations are an applied econometric survey of our recent past. His invaluable revelation of the thinking and beliefs of key administrators of those times will serve to enlighten the student of politics and finance for many years to come. This contribution is an honest document of the wisdom of a man who possesses the refinement of a Julliard graduate, a close friend of Ayn Rand, a successful Wall Street executive, and a brilliant and courageous Colombia University scholar whose willingness to stand in the face of strong and at times potentially lethal opposition is inspiring to say the least. His memoirs will serve mankind well and in my view is worthy of the highest praise.

In keeping with high standards of accuracy and truth, most probably attributable to his Levitical heritage, which is the origin of the tradition of Sacred Scripture, this work in my view is academically reliable and useful for teaching and correction. “The Age of Turbulence”, if understood and pondered by the wise, will render necessary questions and answers, but perhaps more importantly, will manifest tools and examples of profound leadership necessary to accomplish the goals of the oncoming years. We the people will ultimately receive what we deserve for better or for worse. It was never your job, Mr. Greenspan, to keep us from making, heal us of, or compensate for our mistakes. I believe that your wisdom served to provide stability in the face of the changing times which in my view is grounded upon one’s ability to feel, balance and know precisely when to let go. These elements it seems have always been evident in your work. It is with humbleness, awe and trepidation that I proceed further into “The Age of Turbulence.”" —Wildfeather