Monday, May 10, 2010

Tell Me Again Why Freddie Mac

And Fannie Mae are not included in the big Financial Reform Bill? I am just curious since they helped create this economic situation in which we find ourselves, and have drained billions of dollars from the coffers over the past couple of years. Now they want MORE.

Oh, yeah - Freddie Mac is asking for TEN Billion Dollars. I reckon they just want to add it to their tab: ABC News' Matthew Jaffe reports:

Government-backed mortgage giant Freddie Mac today asked for $10.6 billion in additional federal aid after reporting a loss of $8 billion in the first three months of this year.

To date Freddie Mac has been provided with around $51 billion in government funds. The new aid would bring the total assistance to the lender to over $61 billion.

Late last year the Treasury Department essentially agreed to provide a blank check to Freddie Mac and fellow government-backed lender Fannie Mae when the agency controversially removed the cap on federal support for the lenders.

A "blank check"? That is what Geithner wants to give Freddie and Fannie? I reckon that's what happens when you have someone in charge who can't even fill out his own tax forms properly (or, as I like to say, a Tax cheat). Some folks aren't happy about it, though:
Republicans have blasted the administration for that move, as well as for not putting forth a plan to overhaul the government-sponsored enterprises. Thus far the administration’s only action has been the April 14 release of a series of questions for public comment on what to do with the mortgage giants.

In addition, Treasury Secretary Tim Geithner has acknowledged that the government expects to suffer “very substantial losses” on its investments in the lenders, with recent estimates ranging around a minimum of $85 billion.

Well, that's just jake - "a minimum of $85 billion." That's our money, folks.

And let's not leave Fannie Mae out of this mix. Oh, no - now Fannie is asking for some more cash, too, a cool for $8.4 Billion more?:
Fannie Mae requested another $8.4 billion from the federal government on Monday, saying that it expects its deficits to continue due to trends in the housing and financial markets.

The government-controlled mortgage giant said it lost $13.1 billion applicable to common shareholders in the first quarter of 2010. In the year-earlier quarter, Fannie suffered a $23.2 billion loss, but an accounting change makes comparing the year-over-year losses difficult.

Fannie's request for more federal funds comes just four days after Fannie's twin Freddie Mac also asked for a handout - to the tune of $10.6 billion - after posting an $8 billion quarterly loss.

In using Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500) to prop up the mortgage market, the government in December lifted a $200 billion limit on their bailouts, essentially giving the twin housing lenders a blank check. Fannie Mae has already received $76.2 billion from the federal government and Freddie has gotten $50.7 billion.

"In the first quarter, we continued to serve as a leading source of liquidity to the mortgage market, and we made solid progress in our ongoing efforts to keep people in their homes," Fannie Mae President and CEO Mike Williams, said in a press release.

Just to recap, Fannie Mae and Freddie Mac were largely responsible for bringing down the housing market (click HERE to read the rest of the article).

Yes, indeedy, so no doubt the new Finance Reform Bill begins with Fannie and Freddie, right? Oh, so wrong. Chris Dodd, who benefited mightily from Fannie Mae and Countrywide says, "Nooooooooo." Dodd thinks it should wait:
Sen. Chris Dodd (D-Conn.) said Friday that legislation to address troubled mortgage lenders Fannie Mae and Freddie Mac will have to come after the current financial-reform effort.

Fannie and Freddie, which are known as "government-sponsored enterprises" (GSEs), have been a lightning rod for criticism of Democrats during the financial reform debate.

Dodd, who is chairman of the Banking Committee and has led the effort to craft a financial regulatory reform bill, said that there was not enough room in the legislation for rules covering Fannie and Freddie.

"Fannie and Freddie and the whole GSE system and it's a great question and a legitimate one in desperate need of reform," he said on CNBC. "But candidly there's only so much I could only take on with this bill, and so that comes up. But not in this round. It's in the next wave here we have to deal with GSEs."

Well, sure, that makes sense, right? If you live in Upside-Down World, anyway (click HERE to read the rest). What a glaring, blatant, prop up for those two entities that have done SO much to destroy the housing market. Unbelievable.

Frankly, I think this is a dereliction of duty on behalf of our Congress people. They refuse to hold accountable the very companies who wreaked havoc with our economy. They are in collusion with them. Even worse, they continue to throw money down the money hole.

I have used this video before, but it seems mighty timely given the requests of Fannie and Freddie (Onion video alert):

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

If only this was a joke...


Anonymous said...

I'm speechless, Rev. How does anyone, anywhere, think this makes sense? Freddie Mac has a loss of $8 billion, so they want more? What, they haven't lost enough? Fannie wants another $8.4 billion? Has ANYONE in Congress thought to look a little closer at how Fannie and Freddie are being managed and toss the incompetents out on their asses? No, of course not. Just let them keep tossing money down that money hole.

Tim Geithner wants to give Fannie and Freddie a blank check, and then says we can expect very substantial losses on our investments? Hey, Timmy? Why don't you stop investing MY money in incompetently run organizations? Throwing good money after bad invariably means more losses, Timmy. Even I know that, and I didn't finish college.

And OMG, Chris Dodd says there's not enough room in the financial "reform" legislation to include Fannie & Freddie? What, did Congress run out of paper?

I can't stand it anymore. I feel like Howard in The Network....I'm mad as hell and I'm not going to take it any more!

I just want to retire to Montserrat and spend the next 25 years watching the whales.

Rabble Rouser Reverend Amy said...

Hey, SF -

I know, right? Seriously, this is practically criminal, if not in fact. Fannie and Freddie, under Dodd and Frank, created the housing crisis in this country. Not only do they take ZERO responsibility for that, they aren't even doing the least little thing to make it right. Nope, they want to keep throwing money down the Money Hole. And they are.

Tim Geithner - sheesh - can you even BELIEVE this guy was made head of the US Treasury? What is wrong with this picture - a man who cheats on his taxes is made the head of the IRS. Then there is Charlie Rangel - a man who cheats on his taxes who is head of the committee that writes tax law.

No wonder our country is in such trouble.

So yes - both Fannie and Freddie have been given billions, and they will be getting billions more. At some point, after Dodd has finished serving out his bought and paid for time in the Senate, they MIGHT get around to dealing with them. Holy Smokes.

Yep - Montserrat is looking mighty appealing. Any day now...