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The Boston Globe noted today that GOP presidential candidate Mitt Romney, who has a habit of lambasting the “failures” of government-backed mortgage giants Fannie Mae and Freddie Mac, has been profiting from investments in the two firms:


On his financial disclosure statement filed last month, Romney reported owning between $250,001 and $500,000 in a mutual fund that invests in debt notes of Fannie Mae, Freddie Mac, among other government entities. Over the previous year, he had reported earning between $15,001 and $50,000 in interest from those investments.

Think Progress

The Autobot Decepticon transforms one more time! What shape does he wind up in? Why, a run down mobile home!

The investment was also not on Romney’s 2007 financial disclosure form. A Romney aide said the investments were made in the latter half of 2007, after he had filed the earlier disclosure form. That was around the time that the scale of the housing crisis was coming into focus.

As you may recall, the latter half of 2007 was when the wheels started to come off the housing market. At that time Fannie and Freddy were still considered GSE - Government sponsored Entities. Which is to say, the government was not legally obligated to pay off their debts. That didn't happen until late summer 2008. So, Mitt Romney invested in a fund which made money buying GSE bonds when the price was driven down by the fact they were in serious financial straits, banking on the fact that the USG would not (probably, could not) let these semi-private companies go under.

As Mother Jones’ Andy Kroll noted, this particular fund of Romney’s “also included investments in Bank of America, Goldman Sachs, Wells Fargo, and JPMorgan Chase. If Romney invested in those banks in the second half of 2007, as a campaign aide says he did, then Romney’s investments benefited from the federal bailout of those banks, which received tens of billions of dollars to stay afloat.”

And this fund is not part of the blind trust that holds most of the Romney wealth. This is a choice made by Mitt. Mitt Romney positioned himself, in late 2007, to profit from the government bail out of Fannie Mae, Freddy Mac, and the big banks. And profit he has, to the tune of tens of thousands of dollars. All the while decrying bailouts and the failures of the GSE.

Another hypocritical Republican. It's wrong, but at least it's not weird.

3:40 PM PT:
Romney made the investment in a mutual fund called the Government Obligation Fund, managed by Federated Investors Inc. The fund invests in a wide variety of sources, including government agencies and US Treasury notes. But out of a $28.5 billion portfolio, nearly half of the fund was in Fannie Mae, Freddie Mac, and Federal Home Loan Bank notes, according to an SEC filing made in April.

In addition to Fannie Mae and Freddie Mac, the fund also has investments in investment agreements with several banks that received federal bailout money, including Bank of America, Goldman Sachs, Wells Fargo, and JP Morgan. K/blockquote>


Is this Mitt Romney flip-flopping again?

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Comment Preferences

  •  Tip Jar (7+ / 0-)

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

    by blue aardvark on Tue Sep 20, 2011 at 02:51:13 PM PDT

  •  bluea - these are in a mutual fund? (1+ / 0-)
    Recommended by:

    Romney has no influence on what specific investments the fund managers make. The reason that people invest in mutual funds is so that they don't have to pay attention to specific securities. This is a hit piece with no substance.  

    "let's talk about that"

    by VClib on Tue Sep 20, 2011 at 03:37:04 PM PDT

    •  It is a mutual fund with a specific purpose (1+ / 0-)
      Recommended by:
      Mr MadAsHell

      If the prospectus for the fund says they will invest in GSE bonds then you are choosing to buy GSE bonds by buying that fund.

      In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

      by blue aardvark on Tue Sep 20, 2011 at 03:38:42 PM PDT

      [ Parent ]

      •  bluea - from an investment perspective (0+ / 0-)

        what's wrong with that? As an investor you accept the reality of the moment, even if in the future things might change. You might even advocate change. If circumstances change, you make adjustments in your portfolio.

        "let's talk about that"

        by VClib on Tue Sep 20, 2011 at 04:12:20 PM PDT

        [ Parent ]

  •  Attack Mitt on more serious stuff. (2+ / 0-)
    Recommended by:
    GoGoGoEverton, NYFM

    Mitt who is worth hundreds of millions, having less than $500,000 in a government bond fund means he has less than 0.1% of his worth in this bond fund.  Given that the bond fund will have only a fraction of its investments in Fannie and Freddie we are talking about hundredths of a percent of Mitts net worth in Fannie and Freddie.

    If this is the argument why one should not vote for Mitt, this item is so minor that the one making this argument would come across as ridiculous.

    When very minor items are raised to argue against a person, you wind up praising that person as is this is the bad stuff, you are saying he is near perfect.  BTW, Mitt is not near perfect.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Tue Sep 20, 2011 at 03:49:21 PM PDT

  •  does Mitt recall (0+ / 0-)

    actually leaving the dog on the roof?

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