This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Hedge Funds Lobby D.C. On Fannie, Freddie Privatization

Stocks in this article: FMCC FNMA AIG

While the Millstein and Swagel proposals face the politically difficult hurdle of getting politicians to support rebuilding Fannie and Freddie, they take great pains to argue they are not merely endorsing a return to the old system where GSE profits -- boosted by an implicit government guarantee -- went to shareholders and taxpayers were stuck with the losses.

They argue for higher capital requirements for the GSEs, and a government backstop for the mortgages they guarantee, but not for the institutions themselves. Whether that proposal keeps the government far enough away to satisfy Corker and other lawmakers remains to be seen, however.

For the time being, Corker wants to be sure the GSEs aren't privatized without the consent of Congress, and that their profits don't turn into a "piggy bank" for pet projects. With those goals in mind, he has co-sponsored legislation called the Jumpstart GSE Reform Act, along with Sen. Elizabeth Warren (D., -Mass.), David Vitter (R., La.) and Sen. Mark Warner (D., Va.) to ensure that the Treasury can't sell its stake in the GSEs without Congressional consent, and that increases in the fees it charges can't be used to offset other government spending.

"It's pretty unbelievable to me that we have so many people who are worried about the housing market getting rolling even more healthfully than it is today and at the same time they're jacking up the cost of loans by increasing insurance costs charged by Fannie and Freddie and using it to fund government expenditures," Corker said. "It's unbelievable that that's been taking place, and I hate to say it but over the last couple of years people on both sides on the aisle have been doing that. It's beyond belief to me that that's what we'd be doing."

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,227.43 +158.56 0.93%
S&P 500 2,001.83 +29.09 1.47%
NASDAQ 4,620.6680 +72.8340 1.60%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs