With less than three weeks until their deadline, U.S. budget negotiators have yet to break an impasse over revenue, prompting lawmakers to draft plans to blunt $19 billion in defense cuts set to start in January.
Bill Ackman’s hedge fund-firm took stakes in Fannie Mae and Freddie Mac, the government-owned mortgage insurers that investor Bruce Berkowitz is seeking to restructure, and said it may seek talks with management, shareholders and the government.
Fairholme Capital Management LLC, the mutual-fund firm run by Bruce Berkowitz, proposed buying two businesses that insure mortgage-backed securities from Fannie Mae and Freddie Mac to salvage a bet on the two government- backed companies.
Freddie Mac and Fannie Mae will return $39 billion to the U.S Treasury after reporting third- quarter profits, bringing their total payments to within about $2 billion of the cash aid they got after the credit crisis.
Freddie Mac, the government- controlled mortgage-finance company, issued $630 million of securities in its second sale of notes tied to the risk of homeowner defaults at a lower cost than in its initial offering.
Congressional aides are looking at reductions to mandatory programs outside of Social Security and Medicare to replace automatic spending cuts hurting research and the Pentagon, said two aides involved in the process.