I was disappointed with the Christmas Eve ditties from Treasury and
FHFA re: the Agencies. To be honest, I was appalled. The two releases
contained significant information. The timing was obviously an attempt
to slip in some bad news while everyone is drinking eggnog.
Of course that backfired. The blogs, and yes, the MSM disintegrated
those that sent the emails out on Christmas Eve. The smell that these
announcements have created is not likely to go away anytime soon.
If you are reading this you know the story. Treasury ponied up for
another $200b for Fannie and Freddie and the management of these
entities are getting serious paychecks.
The former clearly establishes that Fannie and Freddie have been
nationalized. I don’t care what they say any longer. The numbers speak
for themselves. The $400 billion the taxpayers have signed up for far
exceeds any theoretical value for these two important institutions.
Sadly, ‘the people’ own these things at this point.
The notion that the Agencies are private sector companies with
influential shareholders is over. These entities are no longer big shot
players on Wall Street. There is no earnings prospect for these
behemoths. There is no upside. There is no justification for
multimillion dollar salary packages.
The Agencies fund themselves with lines of credit from Fed and
Treasury. The Fed is buying 1.45 Trillion of their dodgy paper. Why in
the world do we need to pay someone $6mm per year to run that mess?
A question for Mr. Geithner; What are the salaries and bonuses being
paid to the people who run FHA? These are government salaries. FHA is a
part of HUD. Compensation for Fannie and Freddie Exec’s should conform
to those guidelines. Not the other way around. We need to end the myth
that F/F are private sector entities. They are not.
We are not stupid Mr. Geithner. We watch what you are doing very
closely. There are a significant number of us who flat out do not trust
you. You have given us good reason in the past and you have proven
again that you are not trustworthy. You tried to ‘Sneaky Pete’ some
important information past us. In my view you owe us an apology and
explanation, or better still, a letter of resignation. This
Administration has promised a much higher standard than you have