In recent months big and powerful hedge funds have descended on Washington, lobbying for Congress to revive Fannie Mae and Freddie Mac, the government-sponsored enterprises that have been operating out of conservatorship since the financial crisis. These hedge funds had purchased preferred shares of Fannie Mae and Freddie Mac in the hopes that their value would skyrocket under a privatization scheme of the two mortgage giants. Some of these hedge funds even bought up some of the even more speculative common shares of Fannie and Freddie, penny stocks that trade on the over the counter bulletin board.
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