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Townhall
Finance
Apology
to Barney, Barack and Bernanke: I
Forgot You’re Exempt From Our Laws
By John Ransom
Aug 14, 2013
I
want to apologize for doubting those guys,
Barney, Barack and Bernanke.
Turns
out that giving Fannie Mae and Freddie
Mac $188 billion wasn’t going to entail any risk at all to the
government, its
employees, agents and beneficiaries.
Richard
Lehmann has the details in Forbes.
“In
fact, the two organizations [Fannie and
Freddie] have repaid $146 billion of the $188 billion advanced to them
since
they were taken over,” write Lehmann. “In addition, some $90 billion of
‘profits’ were paid to the Treasury that went toward U.S. debt and
deficit
reduction.”
And
all this time I thought that the trillion
dollars stimulus that didn’t create jobs, the green energy scam that
killed the
green energy business in the US, the bailout and subsidization of the
auto
industry, the war on energy, the failed Dodd-Frank banking reforms, the
Obamacare debacle, the rising numbers of people on food stamps, the
deformation
of our workforce to part-time employment, the arbitrary
reinterpretation of the
MACT act, the tax hikes on every single American worker and the failure
to pass
a budget- or even get a vote on one- since going 0-for-96 in 2010 on
the Senate
vote for a budget, was just more proof that Democrats knew nothing
about fiscal
matters.
I
now see I was wrong.
Turns
out that those guys could hang with
Enron, Worldcom, Tyco International and a lot of the other “Big Boys”
when it
comes to accounting prowess. But they have an unfair advantage: They
don't have
to follow our laws.
“Does
anyone remember that the biggest buyer of
Fannie and Freddie mortgages is none other than the Federal Reserve
Bank,”
continues Lehmann, “a government organization that has no bottom line
profit
measure. The Fed, with its quantitative easing program, is simply
buying $40
billion monthly in packaged mortgage MBS securities valued at prices
that are
giving Fannie that wonderful profit.”
So
the government gave Fannie and Freddie money
to bail them out and then bought their product- that is mortgage bonds-
via the
Federal Reserve, which is taking losses on those transactions?
I
have that right, now?
Great.
What
a scam.
Because
of course the Federal Reserve doesn’t
have to follow the laws that govern mere corporations, taxpayers,
non-profits
or any other organization ruled by Generally Accepted Accounting
Procedures.
The
Federal Reserve doesn’t have to mark down
their losses
According
to Lehmann this is the financial
equivalent of General Motors selling their excess inventory in the
Chevy Volt
to themselves at full retail, and counting it as a profit.
And
that turns double-entry bookkeeping into
single-entry profit machines where the final entry is filled-in by you
the
taxpayer.
Sort
of a double-cross-entry bookkeeping.
Of
course if GM did that, someone might go to
jail. Yeah, it’s GM so a jail term is unlikely. But if a company
without the
political juice of GM did it -- say Ford, or some other company not
owned by
Warren Buffett—there’d be jail terms for sure.
But
the laws of man or God or science do not
bind the government in accounting, fiscal or monetary matters.
So,
it’s possible that we’ll never really know
how much the government has lost so far on quantitative easing (QE).
As
I pointed out last week, the Federal Reserve
System, it’s been guesstimated, may have racked up $192 billion in
losses on
those transactions-- just from the recent rise in interest rates alone…
Read
the rest of the article at Townhall
Finance
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