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February 24, 2014

Fannie's Fake Victory Lap

‘The bottom line is that Fannie Mae FNMA -0.30% is making a profit,” declared CEO Timothy Mayopoulos in a Friday conference call with reporters. And it’s a big profit, thanks to the housing recovery and the continuing market advantage of being one of the federal government’s anointed guarantors of mortgage-backed securities. Fannie reported an $84 billion profit for 2013.

“Fannie’s government-backed cousin Freddie Mac FMCC +0.62% is also expected to report a monster year for earnings. And as of this week the toxic twins will officially have repaid to the U.S. Treasury more than taxpayers were forced to pour into them after they were rescued by the feds from near-collapse in 2008. Mr. Mayopoulos says that he’s “very, very happy for the taxpayers.”

“We understand why he’s happy, but it’s hard to see why taxpayers would be thrilled. Mr. Mayopoulos is touting his profits as part of the political effort to free the companies from federal conservatorship so they can live to punish taxpayers again.”

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Read full Wall Street Journal article here

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