But remove them from the equation early on and we wouldn't be talking about the 2008 Financial crisis.
They manipulated the value of securities and derivatives by being the primary consumer of MBSs backed by Subprime loans.
Government subsidies via Fannie and Freddie artificially created value for a product that without Government intervention would have been worthless. ( Technically they were worthless )
And the entire time they were buying up 10s of Billions in securities and Subprime loans they were exempt from SEC reporting requirements.
Finally in 2006 they submitted their first quarterly financial statements to the SEC.
Problem was they only reported 1/10 of their worthless debt.
Think about it. Thats Securities fraud on a unprecedented scale.
Had a investment bank done that their executives would be cooling their heals in Federal prison right now.
By NOT offering up full disclosure on their losses going back to the early 90s or even counting their losses the market was fooled into believing that these securities were more valuable than they actually were.
And the GSEs debt came with a " AAA " status. Not because some ratings agency screwed up. Because the GSEs were backed by the US Government who's debt also had a " AAA " status.