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Fannie & Freddie insolvent and losing money

Friday, November 14, 2008, 12:25 PM

I want to recall that, at the time of the Fannie and Freddie bailouts at the beginning of the summer, Hank Paulson, backed up by a compliant Congressional Budget Office, made the claim that any bailout of Fannie and Freddie was largely symbolic and not likely to cost the taxpayers much, if anything at all.

Here's a blast from the past from the July 22 issue of USA Today:

Fannie, Freddie could cost us $25 billion
WASHINGTON — Congress' top budget analyst says a federal rescue of troubled mortgage giants Fannie Mae and Freddie Mac could cost taxpayers as much as $25 billion.

But Peter R. Orszag, director of the Congressional Budget Office, predicted in a letter to lawmakers Tuesday that there's a better than 50% chance the government will not have to step in to prop up the companies by lending them money or buying stock.

Paulson went on to reiterate those claims.  At the time I found those claims to be ludicrous, as they would require loss ratios for Fannie and Freddie that were not just smaller, but a tiny fraction of the losses that the rest of the mortgage industry had already booked.

Just a few days ago, and barely 4 months after the "50% chance" of no losses, Fannie announced a $29 billion loss:

Fannie's loss: $29 billion
NEW YORK (CNNMoney.com) -- Troubled mortgage-finance giant Fannie Mae reported on Monday that it lost $29 billion in the most recent quarter, putting the firm closer to having to draw on the $100 billion in taxpayer dollars committed to it in September.

Fannie Mae (FNM, Fortune 500) said that as of Friday it had yet to draw on those funds. But the company warned in a filing that "if current trends in the housing and financial markets continue or worsen...we may have a negative net worth as of December 31, 2008."

And today we got this:

Freddie Asks Treasury for $13.8 Billion After Loss
Nov. 14 (Bloomberg) -- Freddie Mac, seized by the government two months ago, asked the Treasury for $13.8 billion after a record quarterly loss caused its net worth to fall below zero.

The company said it expects to receive the money by Nov. 29. The third-quarter net loss widened to $25.3 billion, or $19.44 a share, after writing down tax assets and providing for bad mortgages and securities, McLean, Virginia-based Freddie said in a statement today.

I know enough about accounting that I can state that it is thoroughly impossible for more than $50 billion of losses to materialize out of thin air in only 4 months.  Which means that Paulson and his buddy Peter R. Orszag, director of the Congressional Budget Office, were being less than forthright when they sold the bailout plan to Congress.  Either that, or Fannie and Freddie were hiding the truth.  But somebody knew that there were tens of billions in losses on the way, that much is certain.

In a fair and just world, Paulson and Orszag would now be before congressional committees being grilled about this deception.  I'm not holding my breath for that, though.

Why?

Because Paulson has already proved that he can say whatever he wants and he will not be called on it by anybody.  For example, in his press conference yesterday, he said this:

"Early this week, Fannie Mae reported a record loss, including write downs of its deferred tax assets that make up a significant portion of its capital.

We monitor closely the performance of both Fannie Mae and Freddie Mac and both are performing within the range of our expectations. The magnitude of the losses at Fannie Mae were within the range of what we expected and further confirms the need for our strong actions."

Within the range of our expectations?  That's odd, because back in July the stated range of expectations was a maximum of $25 billion with only a 50% chance of happening. 

And we're just getting started on the Fannie and Freddie losses. So unless they had a "non-public" range of expectations that was 2x to 10x larger than the one they sold to Congress, I find this a difficult statement to accept.

My "range of expectations" has not shifted much.  I think Fannie and Freddie are going to cost us $250 billion over this next year and close to $750 billion overall.

There are two possibilities here for how Paulson is handling this crisis: either he knows more than he is letting on, preferring to drip the information out, or he is constantly behind the situation and is making it up as he goes along.

Of the two, I am not sure which is worse.

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31 Comments

SteveS's picture
SteveS
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Re: Fannie & Freddie insolvent and losing money

And the Iraq war is only going to cost $50 Billion and will be paid for out of Iraqi oil.

I'm not sure which is worse: Are our leaders lying or incompetent?

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krogoth
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Paulson is not worried

Chris,

Paulson is not worried because he has nothing to lose. It's the way I imagine you feel when your worth more than half a Billion dollars in personal wealth. We can swim in an ocean of economic blood, and Paulson will be above it all. His family is safe, his retirement is assured, and his past relationships with China means his finances are probably diversified enough to be bulletproof. He is a lame duck idiot with a lame duck president that are both doing everything they can in the short time they have to jam us even harder.

This is one of the fundamental problems with government, as it has been throughout history. A majority of wealthy people who have never suffered, lost or worried about anything. Never worked a hard day at all. And by work I mean real hard work. Hands dirty work. Out in the sun for 12 hours work. Working for a very low wage. Worrying if your family will be fed that day. Worried if you can keep your house another month. He is a smug and arrogant bastard who talks down even to Congress. But the main thing is he is a rich smug and arrogant bastard.

The political leaders are split about the big 3 automakers, and should they be assisted with bailout money, or is it a losing battle. Who is to say that the banks were not a losing battle? Fannie and Freddie were not a losing battle? Paulson, that's who. He is our decider. Not Congress, not the president, and not anyone else.

If you are waiting for truth or consistency from this white collar, self serving crook, don't hold your breath.

Nothing, and I mean nothing, not one question was asked about the promised transparency when this bailout madness that Paulson stated in the Congressional meeting and Congress said was necessary and important. The other day not one mention from the press, nothing.

This stuttering, lying crook is simply a snake oil salesman. He will be golfing in a couple of months somewhere where the sun is warm. That's the only way he will be outside in the heat. He will be laughing with his economic vampire buddies about this whole deal, and how he got away with it, and more than likely how it will benefit him someday financially even more.

 

 

 

 

 

 

 

 

 

 

 

Davos's picture
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Re: Fannie & Freddie insolvent and losing money

Chris isn't alone in the "My "range of expectations" has not shifted much.  I think Fannie and Freddie are going to cost us $250 billion over this next year and close to $750 billion overall." assesment.

This article holds no punches, it is ripe. One gem that makes your blood boil while you laugh at the way in which it is put.

Here are some selected random "highlights," but I'd reccomend the entire read.

http://www.financialsense.com/fsu/editorials/stathis/2008/1114.html

New Precedent for America:

by Mike Stathis, Managing Principle, Apex Venture Advisors | November 14, 2008 

Financial Irresponsibility Pays

As a desperate attempt to stop the bleeding, banks are stepping up with further efforts to protect delinquent homeowners. To date, this represents the most radical effort to stop the avalanche of foreclosures. It’s thought these ridiculous bailouts will help restore the housing market which will provide more stability to the economy. The problem is that these plans are still insufficient to make any impact. And there is nothing to absorb the massive inventory of housing. If Washington wants to help homeowners make mortgage payments, they need to stop letting corporations send jobs overseas. Similar to the banking bailout, the latest “solution” from Washington will continue to waste taxpayer money. More important, it will reward the wrong people and punish responsible homeowners. 

...Washington needs to start its fund-raising efforts by demanding the $75 billion in bonuses Wall Street bank executives received between 2006 and 2007. In fact, this needs to be done regardless.

...Treasury Secretary Paulson has ensured America’s bailout buffet to be alive and well. Despite the $5 trillion passed out to the banking cartel (either in loans or guarantees), you can bet there will be much more to come. I will absolutely guarantee it. AIG has already received $150 billion and now the Big 3 is lining up for more bailout money. Most likely the airlines will be next. You should expect another few hundred billion to be handed to Fannie and Freddie alone. And we cannot forget about the bond insurers. They are waiting patiently for their piece of the pie.

...As the meltdown continues, it is likely the entire insurance industry will get rescued by taxpayers since they are “too big to fail.” You might recall I warned of numerous industry bailouts a few months ago. I also warned that the original $700 bailout proposal would only serve as a blank check with much more down the road. Finally, I insisted the Fannie/Freddie bailout would cost much more than the initial amount. In fact, I stated that $700 billion might only be sufficient to cover AIG, Fannie and Freddie.

...“Anyone who thinks this bailout will be limited to $700 billion or any figure Washington decides on is naïve. In my view it will cost taxpayers at minimum $3 trillion to $5 trillion and possibly much more depending on many variables.”http://www.financialsense.com/fsu/editorials/stathis/2008/1009.html 

...“None of us wants to be blamed for ruining these mergers and creating a new Great Depression,” replied a congressional aide. Here’s a newsflash for you Washington knuckleheads…a “new Great Depression” has already commenced. And it is here to stay for a long time. All you clowns are doing is making things worse. Americans need real solutions from intelligent ethical leaders, not a continued gravy train for crooked bankers and irresponsible homeowners off the backs of hard-working taxpayers.

 

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DrKrbyLuv
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Re: Fannie & Freddie insolvent and losing money

The US Treasury has become a rogue operation serving the interests of the banks rather than the people. We were also promised transparency but that too was a lie. 

I think the goal is to have the taxpayers (US gov't) provide the collateral for as much of their toxic debt as possible while they maintain the assets. Then, after the collapse, they will seize the assets for the bad debt that they caused. 

 

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Re: Fannie & Freddie insolvent and losing money

great article indeed!

[quote=Davos]...This article holds no punches, it is ripe. One gem that makes your blood boil while you laugh at the way in which it is put....[/quote]

I especially like this part.

[quote=Davos]...If Washington wants to help homeowners make mortgage payments, they need to stop letting corporations send jobs overseas....[/quote]

My biggest belief for a long time has been that "Every dollar is a vote"!

Coutries and communities need to be more self sufficient. Shop locally and do your best to choose quality products from socially and environmentally responsible producers and businesses. Yes, this can be difficult but this can also be empowering.

 

Greedy people with their bad shopping habbits and living beyond their means played a huge part in creating this mess. Unfortunately this is pretty much all of us.

It's no wonder The American Dream is turning into a nightmare. Isn't the #1 employer in the US Wal-Mart? One of the lowest paying jobs and known as union busters. Selling cheap goods that are mostly produced outside of the country is(was) a sure fire way to drain local and even the national economy.

A lot of people can blame the government and the banks for creating the environment that led to all of this but one thing no one wants to do is take any personal accountability. Everyone starts buying the cheapest junk made that's most likely produced in China then they wonder where all the jobs are gone? Gee... why is the American economy failing and the Chinese economy doing so much better for the past while?

 

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Re: Fannie & Freddie insolvent and losing money

Hello Ruhh:

Glad you liked the article - just to cllaify, I didn't put it in a cloud, I didn't wrtite that the author did, I just poted it....

PS Netflix has a super doccumentary on WalMart, I'm sure you have seen it, I liked the part where they coax their working moms to get Wic to feed their kids.

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Re: Fannie & Freddie insolvent and losing money

Here is another waste of money: 

http://www.motherjones.com/mojoblog/archives/2008/11/10880_kashkari_treasury_kucinich_issa_congress_hearing.html

Dennis Kucinich Investigates Treasury's Blank Check

 

Kucinich should just read Mike Stathis's article and watch Chris's Crash Course and save us money. This is an insane asylum, if they need to investigate what is wrong there is no hope.

The cash burns for anything and everything that won't work are going to give us a whole new meaning of velocity which I'm sure will equate to the destruction of the dollar, fixed debt and the fallout will bring death, dispair and ruin.

I don't know which would be better for Congress: a lobotomy or an enema, clearly they are insane and full of it. 

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Re: Fannie & Freddie insolvent and losing money
Chris.....Paulson will now say that he meant there was a 50% chance of Fannie-Freddie costing more than $25 billion. We must have misunderestimated.
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Re: Fannie & Freddie insolvent and losing money

Niave me: In that "New Precedent for America" article that I posted there was a reference to a think tank that I had never heard of. So if you read the entire article, in case you are as niave as I...

http://en.wikipedia.org/wiki/Council_on_Foreign_Relations

 

Or, if you knew about it then maybe you just want to skip to the chase and go front and center to their website: Their "daily analysis" is sponsored, in part by Morgan Stanley...

 http://www.cfr.org/publication/17738/

 

Relaunching Capitalism

November 14, 2008

This weekend's summit of leading world economies won't match the scope of the Bretton Woods conference, to which it has been compared. But it could send important signals at a time of global economic distress.  

Davos's picture
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Re: Fannie & Freddie insolvent and losing money

http://www.cfr.org/publication/17723/ 

Here is there timeline and from Wiki here are a few of their members....

 

[edit]Notable historical members

GDon's picture
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Re: Fannie & Freddie insolvent and losing money

Orwell's 1984 vision of "NewSpeak" is fully in place.

Ultimately, America's educational system has effectively destroyed critical-thinking in at least 3 generations of citizenry.

I cringed in incredulous laughter after listening to Bush carry-on with respect to America's loyalty to "capitalism" and "free markets".

Really?  Capitalism and free markets by whose definition? 

That Paulson can speak and maneuver with either complete ignorance or malintent, further shows that the USGovernment can now operate in a new era of evil impunity, because the American public is completely asleep at the switch.

Nobody wishes for an outcome of calamity, but the facts speak so loudly, that the concrete around the outcome is now firm:

With the Bailouts already in progress, contemplated, and yet to appear, the US economy, and the $USD are soon-to-be roadkill.

No nation or society has historically survived with their currency intact, at the rate and levels of debt being incurred by the USA.

There is no possibility for sufficient tax increases, on an already overburdened citizenry, to cover what 2007/2008 have wrought.

So... what becomes the "end game"?

Devaluation?  How does a fiat-currency already backed by nothing, get "devalued"?  A huge run-up in "printing" (digital and paper)?

New currency?  Will taxes only be allowed to be paid by a "fixed" ratio of new currency to old, and thereby guarantee a greater "feed" into the bloody trough?

Corporate (foreign and domestic financier) confiscation of large swaths of US "property"?  But who to sell it to?

Whichever path, the "royal family" of the USGov branches in Congress and Executive, including Prince Paulson, are sure to plan for their secure futures at the expense of the peasant class.

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Headless
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Re: Fannie & Freddie insolvent and losing money

Re: "Those who will be provided with 0 and 1% mortgages or a write down off of their original mortgage will be enriched unduly. This is not only unfair but it will create more inflation since the recipients will be handed monetary rewards without working for them."

 What an excrutiatingly uncomfortable place it is, being between the rock and...

However, I would propose that when choosing to:

1. support Wall Street so that bonuses and dividends can continue as usual, or

2. give homeowners that were gouged (by a system that overvalued homes by a factor of 2 or more) a break,

I say "partial loan forgiveness" is not only a reasonable course (when end goals are considered; i.e., leaving a nation with the ability to buy other stuff someday), but it is, in fact, fair.

 These unfortunate victims (I know! Not all were victims) bought in an environment when they were being "told" by every source of information available to them that "if you don't buy now, it will be more next year--oh! Yes, yes! I know it's twice the price it was a year ago. That's my point. Sign here."

Wouldn't it be a better choice to excise the tumor on the house keys than to continue to pay the people that planted, nourished, and celebrated the cancerous growth in the first place?

Give the People a break! They O-V-E-R PAID!

Hand the malignancy back...

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Re: Fannie & Freddie insolvent and losing money

http://www.cnbc.com/id/27721218

 "We have in many ways humiliated ourselves as a nation with some of the problems that have taken place here," Paulson said in an interview with CNBC television. (Reporting by Glenn Somerville, Alister Bull and Mark Felsenthal, Editing by Chizu Nomiyama)

WE??????????????????????????????????????????????

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Re: Fannie & Freddie insolvent and losing money

To comment posted by Nonzeroone

Totally agree with you on this. Just a small problem... Don't make the frugal renter and the rest of us pay for this. Tax the crooks who were responsible for this. Some sort of a windfall tax that claws back the last 5+ years of windfall these crooks reaped. 

 

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? Still on the sidelines on the Recession VS Depression game?

Whitehead sees slump worse than Depression
 
 NEW YORK (Reuters) - The economy faces a slump deeper than the Great Depression and a growing deficit threatens the credit of the United States itself, former Goldman Sachs chairman John Whitehead, said at the Reuters Global Finance Summit on Wednesday.
 
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Re: Fannie & Freddie insolvent and losing money

He was Regan's Dep. Sec. of State

Thinks credit card will be worse than housing bubbles... 

http://www.reuters.com/news/video?videoId=93713 

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Re: Fannie & Freddie insolvent and losing money

cybernytrix,

 "Don't make the rest of us pay..."

 Agreed. And if I were Obama:

1. No bailout (TARP);

2. Government "freezes" (disallows) further foreclosures, in conjunction with banks declaring all potential foreclosures (homeowners no making payments for X months)*;

3. Every home is reassessed in the current market;

4. Every bank that holds a mortgage that was going to be foreclosed upon is required to rewrite the loan at the current value; if the homeowners can afford the payment, they stay, if not, they go; if the bank is solvent once this process is complete, the bank survives, if not, goodnight;

5. For those banks that "achieved" insolvency, they are taken over, their assets distributed via the "Lehman Process," and the viable (adjusted) loans are handed off to a solvent bank;

6. SWAP writers suffer what then become calculable losses; certain entities fail (Goldman, Morgan, AIG, Citi, etc.); the wealthy suffer huge losses, the pension funds et al suffer what would be, given the price of the common, marginal additional losses;

7. The past decade's flood of wealth redistibution upward is somewhat reversed...

* Real estate prices would continue to deteriorate, and thus, there would still exist overpayment by homeowners--to some degree, however, it would no longer be an issue for the middle class, only for those sponsoring outstanding SWAPS.

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Re: Fannie & Freddie insolvent and losing money

Sorry to be off topic here, but I am sitting here watching Big Idea on CNBC and they are talking about the economy and saying that Americans need to spend and get out and shop.  Are you kidding me??  Don't they know that we are so in debt already and they still want us to spend.  Yea, that will get us out of this mess.   I tell you, the corporate media is unbelievable!!!  

 This whole crisis to me seem to have been planned from the get go.  They know exactly what they are doing and it's working like a charm.  I never thought I'd see this in my lifetime, but I am preparing for the worst. 

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Kenny Boy Lay was more convincing

Kenny Boy Lay was more convincing when the SS Enron was taking on water and only he and the dirty dozens feet were wet:

http://www.cnbc.com/id/27721218 (Video)

[PLEASE WATCH --- TOWARDS END OF VIDEO PAULSON SAYS: Well please give me your take, mine was that

 

  1.  The Oboma's "Transition Team" it WORKING NOW at the Treasury
  2. They haven't named the new Treasurer, sounds to me like they know who he is
  3. Also sounded to me like the Transition Team told Paulson no more funds and make it your idea
I'm just inferring, but that was my take.....

 

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Re: Fannie & Freddie insolvent and losing money
BILL MOYERS??????????????????????????????????
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Re: Fannie & Freddie insolvent and losing money

Jingle Bells, Jingle KEYS Jingle all the Away from Foreclosure...

Christmas 2008

http://us.ft.com/ftgateway/superpage.ft?news_id=fto111420082014512375 

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Re: Fannie & Freddie insolvent and losing money

Department of the Treasury Agency Review Team Leads

Josh Gotbaum currently serves as an advisor to investment funds, with a special focus on restructurings and management turnaround. He was startup CEO of the September 11th Fund, a charity that serves people, businesses and non-profits. From 1994-2001, Josh held Senate-confirmed positions in Treasury, Defense, and OMB. From 1981-94, he was an investment banker, working on mergers and restructuring in North America and Europe. His clients included major corporations, unions, and government. He also has worked in the White House and at the Department of Energy.

Michael Warren is the Chief Operating Officer of Stonebridge International LLC. He also is on the Board of Directors of the District of Columbia Retirement Board, Catalist, the DC Minority Business Enterprise Center Advisory Board, Southeastern University’s Center for Entrepreneurship, Civitas, Riptopia, and the National Child Research Center. Mr. Warren previously worked at McKinsey & Company, both as a strategic consultant in the technology and financial institutions industries and as a fellow of the McKinsey Global Institute. Mr. Warren served within the White House as Executive Director of the President’s National Economic Council.

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Re: Fannie & Freddie insolvent and losing money

http://www.youtube.com/watch?v=COtE1J5NMbo

g20 Ron Paul 

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Re: Fannie & Freddie insolvent and losing money
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Re: Fannie & Freddie insolvent and losing money

http://biz.yahoo.com/ap/081114/earns_freddie_mac.html

Freddie seeks gov't aid after $25.3B loss
Friday November 14, 8:08 pm ET
By Alan Zibel, AP Real Estate Writer

Freddie Mac seeking $13.8B in government aid after posting 3rd-quarter loss of $25.3 billion

WASHINGTON (AP) -- Freddie Mac is asking for an initial injection of $13.8 billion in government aid after posting a massive quarterly loss Friday.

The mortgage finance company is making the first request to tap the $200 billion promised by the Treasury Department to keep it and sibling company Fannie Mae afloat after the two were seized by federal regulators in September. Freddie Mac said it expects to receive the money by Nov. 29.

The McLean, Va.-based company posted a loss of $25.3 billion, or $19.44 per share, for the third quarter. The results compare with a loss of $1.2 billion, or $2.07 a share, in the year-ago period.

Analysts were divided about whether Fannie and Freddie's losses would ultimately exceed the government's $200 billion pledge. And that may partly depend on the extent to which Fannie and Freddie are used by the government as a tool to ease the foreclosure crisis.

"There is no way that $200 billion will be sufficient, especially as these companies are called on to, frankly, take losses ... for the good of society," said Josh Rosner, managing director of research firm Graham, Fisher & Co.

Others say it's unlikely that losses will soar so high. "I find it difficult to be believe that it will get that far," said Credit Suisse interest rate strategist Ira Jersey.

Ever since the government takeover, Fannie Mae and Freddie Mac's debt has suffered from a lack of confidence among international bond investors. They are concerned about whether or not the U.S. government firmly stands behind the companies' debt.

Once the government actually injects money, that could help resolve that uncertainty, said Alex Pollock, a fellow at the American Enterprise Institute in Washington.

"It will be a demonstration to the international bond buyers of the government's true commitment to supporting these companies," Pollock said.

Fannie and Freddie own or guarantee about half of U.S. mortgage loans. If the companies can pay a reduced premium for their debt sales, that could translate into lower mortgage rates for U.S. consumers.

Freddie Mac's third quarter loss was mainly due to a $14.3 billion charge to reduce the value of tax assets, but also was driven by $9.1 billion writedown on mortgage securities, and $6 billion in credit losses from soaring mortgage delinquency rates and foreclosures.

Freddie Mac said that rising unemployment rates, tightening credit and deteriorating economic conditions "contributed to a substantial increase in the number of delinquent loans," including prime loans made to borrowers with strong credit.

"Continuing home price declines and growing unemployment are now affecting behavior by a broader segment of mortgage borrowers," the company said in a Securities and Exchange Commission filing.

Freddie Mac's overall delinquency rate rose to 1.22 percent, from 0.9 percent at the end of June, and 0.5 percent a year earlier. The number of foreclosed properties that Freddie Mac holds rose to 28,000, from 22,000 in June.

Freddie Mac also disclosed a dispute with JPMorgan Chase & Co., which purchased failed thrift Washington Mutual in late September. JPMorgan has refused to take back bad loans made by Washington Mutual, Freddie Mac said in the SEC filing. Both Fannie and Freddie reserve the right to return loans that they discover to be fraudulent.

On Monday, Fannie Mae posted $29 billion loss in the third quarter as it took a massive tax-related charge. Fannie Mae said it may have to tap the government's for help in the coming months.

Both Fannie and Freddie have changed their accounting for their deferred-tax assets, which can emerge from operating losses, and can be used to reduce future tax expenses. Companies must be able to show they will be profitable if they intend to use the tax assets for earnings in later periods.

The companies' new chief executives, Freddie Mac's David Moffett and Fannie Mae's Herbert Allison, were scheduled to testify on Capitol Hill next week, but that hearing was rescheduled until Dec. 9. The House Oversight and Government Reform Committee is examining the causes of the government takeover.

Both companies have been asked to turn over a long list of documents and e-mail messages concerning the risks the companies took in their mortgage investments, accounting, and compensation for the companies' former CEOs.

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Re: Fannie & Freddie insolvent and losing money
Paulson is an ex-Watergate plumber and an ex-CEO of Goldman Sax ... what else would you expect of him? The truth? He has no idea of what truth is. To see what it is really like to be part of the morally bankrupt group of Wall Street bankers read the following article: http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom
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Re: Fannie & Freddie insolvent and losing money

To compliment Chris's last newsletter about Iceland:

http://www.youtube.com/watch?v=G1vODDWu4Ak

 

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Re: Fannie & Freddie insolvent and losing money

Paulson lives in a world of his own reality.  He knows EXACTLY what he is doing, and he knows that when it's all over, the lives of himself and his family will remain unscathed.  He is one of the 'special' people, and we are the ones who pay to keep it that way.

Until some serious revolution in the economics of the world takes place, nothing in this scenario will change.

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Re: Fannie & Freddie insolvent and losing money

 

And the Iraq war is only going to cost $50 Billion and will be paid for out of Iraqi oil.

I'm not sure which is worse: Are our leaders lying or incompetent?

 

Both

They're incompetent liars

Goal Digger's picture
Goal Digger
Status: Bronze Member (Offline)
Joined: Nov 17 2008
Posts: 39
Re: Fannie & Freddie insolvent and losing money

Federal Reserve, Philadelphia branch, releases "survey" results indicating 14 month recession.  BUT, one-half of the respondents predict a turn around early in '09 ASSUMING another Congressional bailout bill.  One that totals $211 billion.  Crank up the printing press.

 

Economists see 14-month US recession: survey
Nov 17 02:36 PM US/Eastern
The US economy probably went into recession in April in a downturn likely to last 14 months, according to a survey of forecasts released Monday by the Philadelphia Federal Reserve.

The 51 economists on average predicted an annualized drop in US economic output of 2.9 percent in the fourth quarter and a 1.1 percent decline in the first quarter of 2009, the Philly Fed said.

More than half of the panelists say their outlook is based on the assumption that Congress will pass a new stimulus package, with a size estimated at 211 billion dollars.

According to the forecasters, the stimulus package will begin to affect real growth in the first quarter of 2009. They saw modest growth of 0.8 percent and 0.9 percent returning in the second and third quarters, respectively, improving to 2.3 percent in the fourth quarter.

But they predicted unemployment will continue to rise to 7.7 percent of the workforce by the fourth quarter of 2009.

The results were similar to a survey released earlier Monday by the National Association of Business Economists, which predicted a 2.6 percent contraction in fourth-quarter gross domestic product (GDP) and a 1.3 percent decline in the first quarter of 2009.

The NABE panel also expected a modest 2009 rebound with growth averaging 0.7 percent next year.

"Just over 60 percent of the NABE respondents expect that the depth of the recession should be relatively contained, with a peak-to-trough decline in real GDP of less than 1.5 percent, with the balance expecting a harsher contraction," the organization said.

ajparrillo's picture
ajparrillo
Status: Bronze Member (Offline)
Joined: Sep 7 2008
Posts: 72
Re: Fannie & Freddie insolvent and losing money

And the Iraq war is only going to cost $50 Billion and will be paid for out of Iraqi oil.

I'm not sure which is worse: Are our leaders lying or incompetent?

Both

They're incompetent liars

Actually, they are very competent liars.  They acheived the desired outcomes...hoarding of wealth and the diminished capacity of government leading to increased privatization.  STOP GIVING THEM A PASS BY SAYING THEY ARE INCOMPETENT!  This is incompetency by design.

Who is recieving payments in the Iraq War is the key.  Iraqi oil went into new oil deals/contracts and the American people paid for the war itself.  SO, from corporations' points of view, THE WAR is paying splendidly.

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