Via email, from John Hempton:

Frannie is a terribly inefficient way to generate subsidies for people in the 60th income percentile (ie very marginal home buyers). I am sure I could do better with cash and a helicopter and some census maps.

Most of the email was supporting my continued correction of James Kwak. This time, Kwak claimed that Freddie and Fannie do not take interest-rate risk because they issue mortgage securities. In fact, they hold the most of the securities in portfolio, and this portfolio creates an interest-risk management problem.