The United States of Foreign Governments

So it looks like the taxpayer is on the hook for at least $10 Billion to bail out Fannie Mae and Freddie Mac. And as it turns out the reason the US Taxpayer is going to have to do this is...The executives in charge were crooks. They cooked the books and lied about what was really there the whole time telling the public that everything was fine. And the other big reason the taxpayer will get screwed. The foreign governments that REALLY own the United States were worried that THEY would not get their investment back. So the US Government decided to screw over the average taxpayer/shareholder (who will get nothing/loose everything) to keep the true owners of the country from getting upset. The CEO administration has done a fine job of selling off our Country, and still telling us everything is just fine.

The proposal to place both mortgage giants, which own or back $5.3 trillion in mortgages, into a government-run conservatorship also grew out of deep concern among foreign investors that the companies’ debt might not be repaid. Falling home prices, which are expected to lead to more defaults among the mortgages held or guaranteed by Fannie and Freddie, contributed to the urgency, regulators said.

The details of the deal have not fully emerged, but it appears that investors who own the companies’ common stock will be virtually wiped out; preferred shareholders, who have priority over other shareholders, may also wind up with little. Holders of debt, including many foreign central banks, are expected to receive government backing. Top executives of both companies will be pushed out, according to those briefed on the plan.

While it is not yet possible to calculate the cost of the government’s intervention, it could rise into tens of billions of dollars and will probably be among the most expensive rescues ever financed by taxpayers. The takeover comes on the heels of a rescue of the investment bank Bear Stearns, which was sold to JPMorgan Chase in a deal backed by taxpayer dollars. Already, the housing crisis has cost investors and consumers hundreds of billions of dollars.

Regulators are concerned that the companies may have mischaracterized their financial health by relaxing their accounting policies on losses, according to people familiar with the review. For years, both companies have effectively recognized losses whenever payments on a loan are 90 days past due. But, in recent months, the companies said they would wait until payments were two years late. As a result, tens of thousands of loans have not been marked down in value.

So they sold us down a foreign river, lied about it, and now we have to pay. That sounds like good policy, huh?