Obama on Fannie & Freddie: No More Portfolio Trading?

If he were elected President, would Democratic contender Barack Obama support allowing Fannie Mae and Freddie Mac to continue buying mortgage-backed securities for their own portfolios when they emerge from under the government’s wing? The eventual status of the two mortgage giants, and the extent to which they will continue to have a hybrid public-private role, has already become a source of big debate. While John McCain, like many conservatives, argues that investing for their own account is what’s gotten them in trouble and should no longer be allowed, Obama has been less clear; until now, he has essentially said their future structure and functions should be studied closely without offering up many specifics on this key question. But in the economic policy speech he gave in Golden Colorado on Tuesday, Sept. 16th, Obama appears to be moving towards taking a firmer stance against such investments.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.