ML-Implode News - Fannie, Freddie and the Secrets of a Bailout With No Exit

with the unsealing of documents this week that were produced as part of a lawsuit filed against the government, new evidence is coming to light on how intimately the White House was involved in the Treasury's decision in August 2012 to keep all the companies' profits for the government. That move effectively maintained Fannie's and Freddie's status as wards of the state.
The newly released documents go beyond previous disclosures in the case and make clear that the Obama administration never had any intention of restoring Fannie and Freddie, which enjoyed implicit backing from the government before the takeover, to their status as stand-alone entities.
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The new materials cast further doubt on arguments made in court by government lawyers that the profit sweep came about because Fannie and Freddie were in a death spiral and taxpayers needed protection from future losses. Documents unsealed last month also served to undermine that legal stance.
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Preventing the companies from using their profits to rebuild a strong capital position was an explicit goal of the Obama administration, the newly unsealed materials show. In an email sent the day the profit sweep was announced, Mr. Parrott said diverting Fannie's and Freddie's profits would eliminate "the possibility that they ever go (pretend) private again."
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The unsealed documents indicate an intense desire to get rid of Fannie and Freddie as independent entities once and for all. They do not show any concern among Treasury officials that their actions on the profit sweep might violate the law.

Another way to view this is that the Treasury simply knew it needed whatever subsidy it could squeeze out of F&F....

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Fannie, Freddie and the Secrets of a Bailout With No Exit