ACKMAN: The US government is perpetrating 'the most illegal act of scale' with Fannie and Freddie
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Ackman called it "the most illegal act of scale" he has ever seen the US government do.
Ackman spoke on Tuesday evening during a panel at Columbia University for the launch of Bethany McLean's new book "Shaky Ground." McLean and former Fannie Mae CEO Frank Raines were also panelists. Ackman, however, did most of the talking.
During the financial crisis, Fannie and Freddie needed massive bailouts and were taken over by the government. It's been seven years since the financial crisis and the companies are still in a state of conservatorship. Today, the government-
Ackman, the largest shareholder of Fannie and Freddie, and other investors are suing the US government for taking property for public use without just compensation.
"And there is no way they will not be allowed to stand, from a legal point of view. And the reason for that is if the US government can step in and take 100% of profits of a corporation forever, then we are in a Stalinist state and no private property is safe-and take your money out of every financial institution, put it into gold or bitcoin and just get the hell out because we're done, maybe the clothes on your back, but other than that nothing is safe," he said.
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"If you don't own a home, and you're a member of the middle class, you have a problem," he said. "This is the biggest threat to the middle class livelihood is that your cost of living, the roof over your head is not fixed, it's floating."
Ackman said that Fannie and Freddie were set up to make middle class housing more accessible. Together, they have enabled widespread availability and affordability with the 30-year, fixed-rate, prepayable mortgage-a system that's been in place for 45 years.
Ackman said he's optimistic about the future of Fannie and Freddie. He has said before that with the right reforms they could be worth a lot more. He has given the GSEs a price target ranging between $23 and $47, which is well above the current $2 range.
Watch the full panel below:
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