The government has finally taken over Freddie Mac and Fannie Mae.
What we’ve anticipated for some time has come about, primarily because both of these institutions control 50% of home mortgages. It was a train wreck waiting to happen.
Anyway, that’s the official story and they’re sticking to it.
And there will be plenty of fallout. For instance, the common stockholders of both Fannie Mae and Freddie Mac will be most likely wiped out.
But the biggest problem I see is the increased taxation that will surely come because somebody is going to have to pay for all of this. The bill will be astronomical, by the way.
Why should we have to pay? We kept our heads during this wild real estate market. We didn’t go crazy and we didn’t overbuy.
But it all goes back to my explanation that most people don’t understand exactly what’s going on or that they will have to pay for it all in the long run. That’s where most politicians would like to keep us. In the dark.
To read more about Fannie Mae and Freddie Mac Bailouts go to Fannie-Freddie Bailout Just the Start of One-in-a-Century Crisis