Bruce Berkowitz’s recent email discussing too big to fail banks trying to forcibly take control of Fannie Mae and Freddie Mac’s assets as noted by The New York Times’ Gretchen Morgenson.
H/T Corner Of Berkshire And Fairfax
Dear Shareholder,
An article by Gretchen Morgenson published on the front page of the New York Times on Monday, December 7, 2015, sheds light on a surreptitious campaign spearheaded by the “Too Big To Fail” banks to assume control over the mortgage market and usurp the assets of Fannie Mae and Freddie Mac.
During the 2008 financial crisis, Fannie Mae and Freddie Mac helped save America’s home mortgage system and resuscitated our national economy by continuing to provide liquidity when credit markets froze. In the process, the big banks, lobbying groups, and individuals exposed in Ms. Morgenson’s article seized the opportunity to falsely blame Fannie and Freddie for the misdeeds of others. Record legal settlements – exceeding $18 billion to date – paid to Fannie and Freddie validate the wrongdoing by those big banks.
For years, competitors and adversaries of Fannie and Freddie have conducted an unprecedented disinformation campaign, largely carried out through the mainstream media, in which they disseminated deliberately inaccurate information mischaracterizing Fannie and Freddie’s insurance businesses, exaggerating their risks, and understating their benefits. These pervasive false narratives have been particularly effective given that Fannie Mae and Freddie Mac were forced into conservatorship in 2008 and forbidden to speak for themselves.
We wrote in an earlier letter to shareholders that, “…some in government apparently want their friends in the mortgage-industrial complex to take for free what you, the shareholders of these companies, paid for with cash.” Based on the investigation by the New York Times additional evidence has emerged about the small cabal of government officials who have deliberately debilitated Fannie and Freddie in order to benefit the Too Big To Fail banks.
We encourage you to read more at: http://www.nytimes.com/2015/12/07/business/a-revolving-door-helps-big-banks-quiet-campaign-to-muscle-out-fannie-and-freddie.html
Kind regards,
Fairholme
Fairholme Funds, Inc.
4400 Biscayne Blvd.
9th Floor
Miami, FL 33137
