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>
