Only in Washington…….
being a borrower and lender at the same time is what all banks do.
When you subsidize crime guess what you get? Why would anyone borrow to invest in future profits (maybe) when you can get a guaranteed return form the government?
Why can’t we get in on these scams?
Right now, the Federal Home Loan Bank will lend money to community banks for 10 years for around 200 basis points (2%) less than you can earn holding a matching duration Fannie Mae or Freddie Mac note. Thus, smart entrepreneurs are now borrowing money from Obama and then lending it back to him, risk free, all while earning 2% on the spread. (This, by the way, is almost exactly what mortgage REIT Annaly does.) Considering where interest rates are and the low cost of acquiring FDIC insurance, it’s hard to imagine why anyone would buy any other credit.