I can’t figure these guys out.
The Federal government has spent zillions of dollars directly and indirectly to pump money into too-big-to-fail banks but then on the other hand Fannie, Freddie and now the Federal Home Loan Bank want to be compensated by the banks that sold them fraudulent mortgages.
I bet there were some interesting policy discussions in Washington. I think the net result will be the politicians can say they’re playing hardball with the banks (yeah, right, after handing them the keys to the kingdom) and, in addition, the banks will be kissing the boots of the politicians for awhile. What’s not to like for the Washington policymakers?
My bet is it’s all a kabuki and the banks won’t pay Fannie, Freddie or the Federal Home Loan Bank anything because, in the end, the banks are too-big-to-sue for fraud.
Which brings up a sore point. Was it really smart for the feds to use every trick in the book to pump money into banks in order to save them when those same banks sold many billions of dollars of fraudulent loans? I would have thought that fraud thingy would have made those banks too-sleazy-to-save.