Freddie Mac earns $5 billion in second quarter

[progressoid]

Source: Boston Globe

WASHINGTON (AP) — Freddie Mac earned $5 billion from April through June, the seventh straight profitable quarter for the mortgage giant.

The second-quarter gain reported Wednesday compares with net income of $3 billion in the same period of 2012. Freddie says its earnings were due largely to increased profits from investments made to hedge against rising interest rates. That helped offset losses on mortgages during the quarter.

...

Nearly all of Freddie’s second-quarter profit is going back to the government. Under a federal policy adopted last year, Fannie and Freddie must turn over their entire net worth exceeding $3 billion in each quarter to the Treasury. Freddie said its net worth in the second quarter was $7.4 billion.

Fannie earned a record $58.7 billion in the first quarter, capitalizing on tax benefits it had saved from its losses on loans during the crisis. It paid a dividend of $59.4 billion to the Treasury. Fannie has paid back roughly $95 billion of the $116 billion it received.

Read more: http://www.boston.com/business/news/2013/08/07/freddie-mac-earns-billion-second-quarter/Vm4e9Po38sNxdte3XHd5aL/story.html

[QuestForSense]

1. Obama to Propose Eliminating Fannie Mae, Freddie Mac

Seems like I might be missing something. This posted yesterday:

On Tuesday, Mr. Obama will deliver a speech in Phoenix to, as White House spokesman Jay Carney put it Monday, "lay out proposals for continuing to help responsible homeowners and those Americans who seek to own their homes."

Specifically, the president will lay out a proposal to overhaul the mortgage finance system and urge Congress to phase out Fannie Mae and Freddie Mac, which were bailed out by the government five years ago. In its place, Mr. Obama will propose shifting the bulk of the burden of backing mortgages to the private sector.

http://www.democraticunderground.com/1014557991

[Helen Borg]

2. I'm having the same question here.

They seem to be making huge profit, so why shutting them down? Plus, remember that there are many people who had invested a lot of retirement money in shares in these two companies. If you remember back then, just a month or two before Fanny and Freddie got killed, the US Government had reassured investors that all was well. Those people lost 95% of their investment.

[Myrina]

5. Cuz some Wall Street CEO needs that $5B

n/t

[progressoid]

3. Well,

I'm sure there will be proper government oversight and such.

And by oversight, I mean we'll still bail them out when they fuck up again.

[bluedigger]

4. As soon as they finish repaying the taxpayers, shut them down. n/t

[progressoid]

8. Not shut down. Privatized.

[Dreamer Tatum]

9. WHAT???

Tell me, Einstein, where liquidity for mortgages is supposed to come from if you shut down Fannie and Freddie?

[bluedigger]

11. Okay, then privatize them.

Good enough for you, genius?

[PSPS]

6. That explains Obama's proposal yesterday to turn it over to the banksters. They want that money.

[avaistheone1]

10. Correct.

We were just talking about that in our home last evening.

This is Obama's wet kiss to the banks.

[James48]

7. Meanwhile, back at the ranch....

I am sitting on several thousand shares of Freddie Mac that I have been holding since they were actually worth something back in 2008. I am HOPING to eventually get my money back that evaporated, but if the President is successful at dissolving Freddie, it means my shares will be worthless.

There is always HOPE- as long at Freddie keeps making $4+ billion per quarter!