Your tax dollars at work:

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Please note the date...

Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds
$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals According to FreedomWorks Analysts

Last update: 11:08 a.m. EDT July 11, 2008

WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) -- As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.
The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."
FreedomWorks President Matt Kibbe commented, [b]"The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries."
"A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, [b]who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors."
"A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics."
SOURCE: FreedomWorks

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the Cayman Islands

4CC, is that you?

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http://www.npr.org/templates/story/s...oryId=94369826

China Eyes Fannie Mae, Freddie Mac Bailout


All Things Considered, September 7, 2008 · The government takeover of Fannie Mae and Freddie Mac is making waves far off American shores. China is watching the events closely because some 10 percent of China's gross domestic product is invested with the troubled mortgage giants. NPR's Adam Davidson talks with host Jacki Lyden about China's stake in the U.S. mortgage industry.


A Bailout PrimerYour Questions
The U.S. government has taken control of mortgage giants Fannie Mae and Freddie Mac, and their top executives have been removed, Treasury Secretary Henry Paulson said. The intervention comes after the companies lost billions in the housing market turmoil, with no sign that things are getting better.

In a news conference Sunday, Paulson said that the two companies will be put into conservatorship, similar to a condition of Chapter 11 bankruptcy. The Federal Housing Finance Agency, which regulates the two companies, will manage Fannie Mae and Freddie Mac on a temporary basis.

"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe," Paulson said.

Fannie Mae and Freddie Mac were created by Congress in an effort to free up money for the mortgage market.

While they were eventually privatized, the two have always operated to some extent with the implied guarantee of the federal government backing them up. Together, they are tied to roughly half of the nation's $12 trillion mortgage market.

Stockholders in the two companies have already seen the value of their shares fall by more than 80 percent this year.

The Federal Reserve and other federal banking regulators said in a joint statement Sunday that "a limited number of smaller ins utions" have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were "prepared to work with these ins utions to develop capital-restoration plans."

[boutons_]

I read where it was actually China's pressure/decision, not the Repug Exec, that initiated the bail out of F&F.

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Lest anyone feel we are obligated here....

"The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries." "A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors.

I've made bad investments before...China didn't bail me out. Plus they already got paid for their risk. em.

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Put a crimp in their economy and gas prices will get even cheaper.

[byrontx]

We're depending on communists to keep our capitalist system working. Life seems to be more and more like the Onion.