Matt Taibbi: Government secretly plans Wall Street takeover of Fannie, Freddie

Rolling Stone’s Wall Street hatchet-man on the hidden truth of #FannieGate

Housingwire:

If Rolling Stone’s Matt Taibbi is to be believed, yes, there absolutely was a government conspiracy behind the bailout and subsequent takeover of Fannie Mae and Freddie Mac.

And now, the government is fighting tooth and nail to keep the evidence of that conspiracy a secret, all while plotting something far more insidious — the privatization of the government-sponsored enterprises.

Has the shock subsided?

In a long piece posted Monday, Taibbi, who’s made a career of taking on Wall Street, aims his sights on Fannie and Freddie bailout, the mountain of federal government documents pertaining to it, and efforts by the “most transparent administration in history” to keep those documents from seeing the light of day.

Some of those documents surfaced recently as part of lawsuits filed by a series of Fannie and Freddie shareholders, who sued the government, claiming that the government’s “sweep” of all of the GSEs’ profits was not only unnecessary because the GSEs weren’t actually in dire straits, but illegal as well.

The recently unsealed documents only scratch the surface of the massive collection of documents that the government has used “executive privilege” to keep under wraps because they supposedly reveal the truth about the GSE bailout.

According to Taibbi, the series of now-unsealed depositions given in the shareholders’ lawsuits are just the beginning of an “11,000-document cache of government communications” relating to the governmental takeover of the GSEs.

Taibbi writes that the still-sealed documents do more than show Fannie and Freddie weren’t actually in the supposed “death spiral” that the government claimed when it modified its conservatorship agreement with Fannie and Freddie to claim all the profits from the GSEs.

According to Taibbi, the documents not only prove that the government lied about the GSEs, the documents also likely reveal the government’s plans for the future of Fannie and Freddie and how the country’s biggest banks are conspiring with the government to takeover the country’s housing finance system.

Here’s Taibbi on the conspiracy:

Likely also buried in the still-sealed documents is a wealth of information about the government’s plans for future reorganization of Fannie and Freddie, a huge looming event in the history of American finance.

Many of the government officials who were involved in the decisions surrounding the GSE conservatorship are now in the private sector, working on proposals for much-anticipated GSE reform.

Without getting too deeply into the weeds of this even more complicated tale, government officials have been working with Wall Street lobbyists for years on a plan to have a consortium of private banking interests step into the shoes of Fannie and Freddie.

If this concept actually goes through, it would be the unlikeliest of coups for Wall Street. Having nearly triggered a global depression eight years ago, the usual-suspect, too-big-to-fail banks would essentially be put in control of the same housing markets they all but wrecked last time around.

2 responses to “Matt Taibbi: Government secretly plans Wall Street takeover of Fannie, Freddie

  1. Reblogged this on Deadly Clear and commented:
    This wouldn’t be a takeover – it would be more like the relinquish of custody to the indigent father.

  2. There is more to the GSE story than meets the eye . Take it from an insider ..A lot more as in punitive tax

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