A recent study from the Congressional Budget Office (CBO) has zero credibility. It pegged likely taxpayer losses in the Fannie Mae and Freddie Mac bailouts at $25 billion. For those with a sense of history, it is worth remembering that the S&L bailout had a $160 billion price tag. The numbers diverge so far from reality as to be laugh-out-loud funny. Funny, that is, except that the CBO estimate demonstrates a willful disconnect with the actual consequences of federal government actions.
As demonstrated below, the real cost of the bailouts will easily exceed $1.3 trillion. In fact, the real cost is likely to range between $1.3 trillion to $1.6 trillion, and is not unlikely to reach $2.5 trillion.
“Russia says further cuts Freddie, Fannie holding”
“SOCHI, Russia, Sept 5 (Reuters) – Russia has slightly further reduced its holdings of U.S. mortgage agencies Freddie Mac (FRE.N: Quote, Profile, Research) and Fannie Mae (FNM.N: Quote, Profile, Research), central bank’s first deputy chairman Alexei Ulyukayev said on Friday.
At the start of the year Russia held $100 billion — or over one sixth of its gold and forex reserves — in Fannie Mae,
Freddie Mac and Federal Home Loan Banks.
In the summer, officials said that the holdings had been reduced by around 40 percent through not replacing maturing paper.
