[quote=Eugene]We (taxpayers) didn’t lose anything with Fannie and Freddie, nor will we. We essentially loaned them $150 billion at 10% interest (…) By the time they are done repaying the loan, we the taxpayers will probably end up making more money from the Frannie deal than from the latest GOP proposed budget cuts.[/quote] And where, pray tell, do you think Frannie and Freddie will get the money to pay the principal back, plus 10% interest? They are bleeding every month!

[quote]You have a logic gap here. Money flowing into mortgage brokers and subprime borrowers was not going into bonds with even a shred of implicit government guarantee.[/quote] I never said that money flowed from subprime borrowers to bonds. You got it backwards! Investors kept buying bonds with an implicit GSE guarantee, so that liquidity was available to keep funding subprime loans. The other part of the scam (not necessarily GSE-related) was the rating companies such as S&P and Moody’s giving “prime” (A+) ratings to slices of subprime loan bundles.