Outside the Beltway

Fannie Wants More Tax Dollars

Steve Verdon
26

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Fannie Mae has gone back the U.S. Treasury with its hand out asking for another $19 billion.

Fannie Mae has been operating under government conservatorship since September. It says its net loss in the first quarter were $23.2 billion, or $4.09 a share. The larger-than-expected loss has driven the company’s net worth below zero and has triggered a request for an additional $19 billion from the U.S. Treasury.

Fannie Mae took $15.1 billion from the treasury in March. It has a $200 billion federal funding commitment from the Treasury to help it handle loans and mortgage bonds that continued to deteriorate as the recession pushed more homeowners into foreclosure.

In company statements Fannie Mae said its net worth fell to negative $18.9 billion as of March 31, from $15.2 billion on Dec. 31, and $9.4 billion on Sept. 30.

Great.

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26 responses to “Fannie Wants More Tax Dollars”

  1. Bithead Avatar
    Bithead

    Comon’ Steve… did you ever figure it would go down any other way?

    There’s only one way this bailout fever ends…. real change.

  2. Drew Avatar
    Drew

    I’m very distressed. Bit, you don’t think we have change we can believe in??

    Golly gosh. I’m going to have to rethink my worldview………(snicker)

  3. Drew Avatar
    Drew

    Steve –

    One wonders what this portends for the banks…….

    Better revisit those stress tests…..

  4. odograph Avatar
    odograph

    Come on you guys, you know Congress and the Executive, starting under GWB, ordered Freddie and Fannie to go buy junk.

    What the heck did you expect?

    Oh I forgot, it’s all Obama, because we have the attention span of squirrels.

  5. odograph Avatar
    odograph

    (Note to brain-draggers, the order was in “clean up phase” post-pop.)

  6. Steve Verdon Avatar
    Steve Verdon

    Come on you guys, you know Congress and the Executive, starting under GWB, ordered Freddie and Fannie to go buy junk.

    And it is pretty much the same Congress….

  7. odograph Avatar
    odograph

    Sure, but the logic wasn’t for simple expansion of the state. That was the first months of the credit crisis, absent buyers, the horrors of mark-to-market.

  8. Steve Verdon Avatar
    Steve Verdon

    Your narrative needs some work Odo, its rather incoherent.

  9. charles austin Avatar
    charles austin

    The graft that keep on grifting.

  10. odograph Avatar
    odograph

    I am assuming (again) some knowledge on the part of my reader.

  11. Duracomm Avatar
    Duracomm

    Odograph,

    The Bush did it too argument is getting rather tiring.

    Obama was supposed to be about change, not continuing the worst traits of the Bush administration.

  12. odograph Avatar
    odograph

    Duracomm, was “Bus did it too” all you got out of that?

    What about that fast recap: “That was the first months of the credit crisis, absent buyers, the horrors of mark-to-market.”

    For a full history listen to: Global Pool of Money Got Too Hungry and the follow-on Another Frightening Show About the Economy

    A lot of good interviews with traders in the trenches.

  13. Duracomm Avatar
    Duracomm

    Odograph,

    Your original comment is in blockquotes below.

    The “starting under GWB” statement shows your comment is yet another example of the pathetic bush did it too argument.

    This argument is mostly used by people defending the sorry spectacle of obama carrying on the worst policies of the bush administration.

    Come on you guys, you know Congress and the Executive, starting under GWB, ordered Freddie and Fannie to go buy junk.

    What the heck did you expect?

    Oh I forgot, it’s all Obama, because we have the attention span of squirrels.

  14. Duracomm Avatar
    Duracomm

    One other thing.

    Obama is president now. If he carries on stupid bush policies it is indeed all obama.

    Attention span has nothing to do with it.

  15. odograph Avatar
    odograph

    “Starting under Bush” is historical fact.

    When you can’t stand fact … start to worry.

  16. odograph Avatar
    odograph

    Look, sending Freddie and Fannie in to buy Mortgage Backed Securities, after they crashed, after the defaults started, was not the cleanest possible plan.

    But once you do that, you know you are going to have costs come out of it.

    Bush and Paulson may have been wrong, but they were trying to clean things up.

    If you geniuses are going make this “an Obama thing” first of all tell me how, without a magic time machine, he can undo those Bush-era purchases?

    And then tell me how you would have unfrozen the credit markets yourselves?

  17. floyd Avatar
    floyd

    odograph;
    Sorry but you are simply wrong, or just plain biased , this mess started with Clinton’s enforcement of the Community Reinvestment Act, forcing Fannie Mae to buy subprime loans with little or no down payment,which were given without the recipient being financially qualified.
    Sen. Chris Dodd, D-Conn., and the chairman of the Senate Banking Committee, should have been forced to resign for his part in this mess. Rep. Barney Frank, D-Mass., and chairman of the House Banking Committee, who proudly proclaimed Fannie Mae and Freddie Mac sound just last July, should be forced to resign as well… And what about Sen. Charles Schumer, D-N.Y
    These are hardly members of GWB’s administration.
    So you see there is plenty of blame to go around
    The blame does rest of course on both parties…
    To the Democrat Party for acting like Democrats,and to their constituents for swallowing their line of BS.
    Also to the Republican Party [mostly GWB’s administration]for acting like Democrats and betraying the trust of their constituents.

  18. odograph Avatar
    odograph

    The CRA thing has been disproved with charts and numbers, but it’s a perfect example of what’s going on in this thread, and places like it:

    It doesn’t matter to you what is true, only that you have something to tell yourself.

  19. Duracomm Avatar
    Duracomm

    Odograph,

    Big government obama fanboys like yourself are a perfect example of what is going on in this thread and in other places.

    You refuse to ignore the root causes of the housing problem and continue to support bad obama policies using “bush did it too” arguments. You can’t seem to get your head around the idea that if it was bad policy for bush it is bad policy for obama.

    Government policies were the primary driver of the development of the housing bubble.

    Full stop end of story.

    Until folks like you realize that fact we are likely to have another government induced housing caused financial disaster.

    Obsessive Housing Disorder

    Nearly a century of Washington’s efforts to promote homeownership has produced one calamity after another. Time to stop.

    The Times’s analysis exemplified our collective amnesia about Washington’s repeated attempts to expand homeownership and the disasters they’ve caused. The ideal of homeownership has become so sacrosanct, it seems, that we never learn from these disasters.

    Instead, we clean them up and then—as if under some strange compulsion—set in motion the mechanisms of the next housing catastrophe.

  20. Duracomm Avatar
    Duracomm

    Odograph,

    You might want to spend some time thinking about root causes.

    CRA, Fannie and Freddie were all catalysts that helped trigger the blowup of the housing bubble.

    They were not the only cause but absent them the blowup would have likely been much smaller.

    CRA required riskier lending practices. Fannie and Freddie were major buyers of bundled mortgages providing a convenient way for the lenders to get the risky loans off of their books.

    The risk was perceived as low because fannie and freddie were implicitly backed by the government and were therefore too big to fail.

    Absent those factors to help get get the ball rolling the bubble would likely have been slower to develop and would not have gotten as large as it did.

    Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis

    Yet the FDIC has turned up the heat on Petrucelli’s bank, giving it an apparently rare “needs to improve rating,” for not making more risky loans under the Community Reinvestment Act.

    Me: How many East Bridgewaters are out there that knuckled under to the pressure and started handing out mortgages to whomever? I am not saying that CRA is the only factor here. There is plenty of blame to go around, regulators, Alan Greenspan, derivatives desks on Wall Street. But to let CRA and its enablers off the hook is ridiculous.

    The FDIC apparently gave the need to improve rating after the housing bubble burst.

    Hard to fathom what the FDIC was telling banks about lending policies while the boom was developing.

  21. Duracomm Avatar
    Duracomm

    Odograph,

    Fannie and Freddie need to be parted out and privatized. It was stupid of bush not to do that and it is stupid for obama not to do that.

    As long as they remain under the control of government they provide a real risk of being used by rent seekers and those with political motivations to reinflate the housing bubble again.

    This is already starting to happen.

    Let’s Not Reinflate the Housing Bubble
    Haven’t Fannie and Freddie done enough damage?

    A consortium of independent mortgage bankers is pressuring the government to allow Fannie Mae and Freddie Mac to expand their activities into “warehouse lending.” Any policy that aims to reinflate the housing bubble is bad news, but this is more than that.

    An article by Stanley Street on the rise of warehouse lending in the March 2006 issue of Mortgage Banking noted that the institutions rushing into warehouse lending were drawn by the high margins to be found in subprime mortgages, but they were ill equipped to manage the associated risks.

    The last thing we should want is for the government to allow Fannie and Freddie to plunge into warehouse lending.

  22. floyd Avatar
    floyd

    A message pinned by Orwell and embraced by every statist since that day….
    “Who controls the past controls the future. Who controls the present controls the past.
    also he wrote..
    “If you want a vision of the future,(of statist control) imagine a boot stamping on a human face – forever.”

    Apparently, It does matter to Statists what is true…so it can avoided it like the swine flu!!

    A pox on your charts and numbers. As always,”liars may figger but….”
    …………………………………………..
    Tangent humorous note…

    The spell check program said that “statist” is not in the dictionary, and suggested “stardust” as an alternative!lolololol!
    What a perfect Orwellian example of “newspeak”!

  23. G.A.Phillips Avatar
    G.A.Phillips

    “Starting under Bush” is historical fact.

    lalalalalalaala Donkeypoop!!! try Carter then Clinton then Brush tried to get some one to regulate it then then the shit birds took over congress and pulled it strait into the toilet.

    why ain’t Barney the purple congressmen and Crissy Dodd in prison???????

  24. odograph Avatar
    odograph

    Jeez GA, why not start with Washington?

    (If you are going to work that hard.)

  25. odograph Avatar
    odograph

    BTW, I totally agree that Washington should stop subsidizing home ownership. I’ve been down with that for 20 years. No problem.

    I can just separate my position from the history and the various threads of the history.

    You guys are just pretending, simplifying, making black and white something that is a rope of gray.

    I never wanted a Freddie or Fannie, but I can see why, when the credit markets siezed under Bush, that they were used as a tool in the cleanup. That’s the way Washingon works.

    BTW, this is a weak retreat:

    There is plenty of blame to go around, regulators, Alan Greenspan, derivatives desks on Wall Street. But to let CRA and its enablers off the hook is ridiculous.

    So give them 5% liability in practical terms, and 99% political liability if you are a wingnut.

  26. G.A.Phillips Avatar
    G.A.Phillips

    I never wanted a Freddie or Fannie, but I can see why, when the credit markets siezed under Bush, that they were used as a tool in the cleanup. That’s the way Washingon works.

    dude, under Bush, in time of war,greatest economy in the history of the world, then 2 years ago, liberals took hold of purse strings, and just like new theory of evolution, economy leaps to wost ever. tell me were I’m mistaken?

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