Fannie Mae has never publicly disclosed how much money it could lose if interest rates rose 1.5 percentage points in a very short period of time.
Sentiment: NEGATIVE
For years, critics of Fannie Mae have warned that it does not give them enough information to judge its risks.
The bailout of Fannie Mae is completely off the books. It's going to cost us hundreds of billions of dollars. Yet nobody is placing this in any type of column in accounting for federal debt.
I don't think anybody has indicated that I did anything but do my job at Fannie Mae.
Never invest emergency savings in the stock market.
Fannie Mae is owned by shareholders but operates under a federal charter that exempts it from paying state or local taxes. As a result, many professional investors think the government would repay the debt that Fannie Mae had issued if the company could not, although Fannie Mae explicitly says that its bonds do not carry a federal guarantee.
Fixing Fannie Mae and Freddie Mac in isolation, without looking at the big picture, would be short-sighted.
The Federal Reserve has never suffered any losses in the course of its normal lending to banks and, now, to primary dealers.
Fannie Mae has traditionally only bought and sold mortgages. But when a loan held by the company goes into foreclosure, Fannie Mae gains ownership of the underlying property until it is resold to new investors.
Low interest rates are a big opportunity for investment. But the issue is that this money should go to the real economy, not the financial economy.
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.