This Chart Provides More Reason to Abandon the GSEs

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Still think using government-sponsored enterprises (GSEs) to backstop the mortgage market is a good idea? Here's a chart that might convince you otherwise. Since 1970, Fannie Mae has posted a cumulative loss of $72.4 billion. That's the sum of all the profits and losses of the firm in the last 30 years. To be fair, it might not be quite this bad, as it doesn't appear to adjust for inflation. But considering that the cumulative up through 1985 was only a profit of about $15 billion, Fannie should still end up a net loser. Of course, its losses continue this year. Here's the chart, provided by Brendan Moynihan at Bloomberg:

loser fannie 2010-08.PNG

Read the full story at Bloomberg.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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