Freddie Mac Seeks Billions More After Big Loss

[Amerigo Vespucci]

Source: The New York Times

WASHINGTON (AP) — Freddie Mac is asking for $10.6 billion in additional federal aid after posting a big loss in the first three months of the year.

The new request will bring the total bill for rescuing Freddie Mac, which has been effectively owned by the government since nearly collapsing in September 2008, to $61.3 billion.

Freddie Mac said Wednesday that it lost $8 billion, or $2.45 a share, in its first quarter. The results compared with a loss of $10.4 billion a year earlier. The most recent quarter includes $1.3 billion in dividends paid to the Treasury Department.

The company, however, cautioned that new accounting standards made it difficult to compare the most recent quarter with the year-earlier period. In the first quarter of this year, Freddie Mac was forced to bring $1.5 trillion in assets and liabilities onto its balance sheet, causing the company’s net worth to fall by $11.7 billion.

Read more: http://www.nytimes.com/2010/05/06/business/06freddie.html?src=busln

[Robb]

1. I believe that is the entire point behind new accounting standards, yes?

:eyes:

Seriously, could we be in any worse shape if we just tell everyone who has a home loan owned by Freddie, "Never mind, we're cool. Just forget about it, no need to pay us back."?

[howaboutme]

2. Rahm Emanuel says taxpayers don't need to audit the FED

This is exactly why taxpayers need to know where our money is going and is why the FED needs to be audited. The relationship between the big banks and Federal Reserve and Treasury Secretary Geithner and is as incestuous as it gets. Taxpayers are kept in the dark.

http://www.huffingtonpost.com/2010/05/03/rahm-working-with-fed-to_n_561505.html

[No Elephants]

10. Sadly, Rahm ain't the only one saying that. And Bernanke was saying it before Obama

re-appointed him. So, why did he get re-appointed?

[BumRushDaShow]

3. Geithner and Paulson are supposed to testify Thurs.

I suppose this was announced ahead of the testimony? :shrug: :banghead:

[unabelladonna]

4. abolish the fed

what is the purpose of the fed?
i used to think it was a gov't entity to regulate the big, bad guys...they always tried to pass it off as this big, benevolent organization which does good things to help americans and "protect" our money.

[Catshrink]

5. $10 billion, eh?

We could use that money to fully fund education and avoid the layoff of 300,000 school personnel, repair school buildings, and improve infrastructure. We could save the jobs of thousands of police officers and firefighters. We could repair bridges and water treatment facilities. We could build a few windmills. We could rescue thousands of homeowners from foreclosure.

Fuck Freddie Mac.

[Oregone]

6. Huh...would it of lost that much if the government focused on keeping people in their homes?

So now Freddie Mac gets a bailout, and people will still be upside down with mortgages that will cause continued loss (and continued need to bailout out Freddie Mac)

[Demeter]

7. Why Pour More Money Into the Black Hole of DC?

Unless the money goes to pay off and burn the mortgages, forgetaboutit.

[defendandprotect]

8. k

[conspirator]

9. Sure. Why not? But first tell them to put their heads on a wooden Device

with a huge sharp Blade hanging from a rope.
It's just standard procedure before getting an Aid Package.

[No Elephants]

11. Only in France. In America, we kiss your bottom as we bail you out and then

we make arses of ourselves rationalizing why your executives should get a huge bonus to boot.

Liberte, Egalite, Fraternite seems to mean something entirely different in American in the Third Millenium than it did in American and France during the 18th Century.

Meanwhile, has anyone seen my knitting needles?

[No Elephants]

12. From wiki: Freddie Mac "is a government sponsored enterprise....:

Boys and girls, do you see anything wrong with that picture? A government-sponsored enterprise?


"Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market."



Great. Our "government sponsored enterprises" sell derivative securities, just like Goldman Sachs.


"On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA (see Federal takeover of Fannie Mae and Freddie Mac). The action has been described as "one of the most sweeping government interventions in private financial markets in decades".<3><4><5>"


More great--but it gets better--or, rather, it gets worse:


As of the start of the conservatorship, the United States Department of the Treasury had contracted to acquire US$1 billion in Freddie Mac senior preferred stock, paying at a rate of 10 percent a year, and the total investment may subsequently rise to as much as US$100 billion.<7>

Home loan interest rates may go down as a result and owners of Freddie Mac debt and the Asian central banks who had increased their holdings in these bonds may be protected. Shares of Freddie Mac stock, however, plummeted to about one U.S. dollar on September 8, 2008. The yield on U.S Treasury securities rose in anticipation of increased U.S. federal debt.<8>

Read the entire wiki. http://en.wikipedia.org/wiki/Freddie_Mac


Ain't "governent-sponsored enterprises" the best of all possible plutonomy worlds?


Meanwhile, why are the people who run Moodys not in jail?