The editorial board for the Wall Street Journal is not pleased, and it's got a platform to let others know.
Editorial writers of "Fannie and Freddie Forever," begin a their "review & outlook" opinion piece as follows:
Washington is a place where bad ideas go to live forever. How else to explain the latest innovation from federal regulators to keep Fannie Mae and Freddie Mac dominating the market for mortgage finance?
Put it this way, it doesn't get kinder from there. Although, it is appropriately enough marked, "opinion." Here's the kickers:Now the toxic twins are again selling paper that they claim is not backed by taxpayers. Freddie’s website says its new “Structured Agency Credit Risk” debt notes are “unsecured and unguaranteed bonds.” Fannie’s website promises the same and says its “Connecticut Avenue Securities” are part of a larger “Credit Risk Sharing” initiative “to reduce the government’s participation in the mortgage market.”
That’s Connecticut Avenue in Washington, D.C., by the way, which is apt. Taxpayers have learned the hard way not to believe a word on this subject from either government-sponsored enterprise—or their political patrons. But you’ll be happy to know that investors are enjoying fat returns while the toxic twins get political cover to continue their central role in mortgage finance.