Note from an outraged reader:
Where's the media and the public outrage for these 2 gov't black holes? How can the public believe anything the gov't says about any fiscal matter?
Scott Heck, AWM
Vice President - Financial Consultant
RBC Wealth Management
Rochester, MN 55902
And here's the lead to the attachment, from WStreet Market Commentary:
FANNIE MAE & FREDDIE MAC OFF THE BOOKS (FINAL EDITION)
By Charles Payne, CEO & Principal Analyst
5/11/2010 9:25:59 AM Eastern Time
While the market was celebrating the latest trillion dollar bailout, Fannie Mae posted yet another net loss. The loss of $11.0 billion was the 12th consecutive quarter of losses from the government sponsored enterprise. Consequently, the company needs to dip into their unlimited funding pot (this gift was stealthily pushed through last Christmas Eve, and it just keeps on giving and taking) for another $8.6 billon. The tally for Fannie is now $84.6 billion, and with its smaller brethren Freddie Mac they owe the American taxpayer $145.0 billion. It's sure to continue growing. The pool of non-performing loans climbed to $224.0 billion from $217.0 billion in the last three months. Over the past two years, the Company has lost $145.0 billion, which is more than double the profits the Company made over the previous 35 years.
5.47% of loans guaranteed by Fannie are 90-days past due, and that is seen as good news because it's a slight improvement from 5.5% in the preceding quarter and was the first Q/Q decline in three years. Yes, the Street took all of this in stride and saw the good news, sending the stock up a few pennies. These GSEs are being used by the White House to manipulate the housing market, but even an unlimited capacity to tap taxpayers hasn't been enough. There were 94,000 modified mortgages, more than double the preceding quarter, but foreclosures increased to 62,000 from 47,000.
Here's the real crazy thing about all of this money and risks taxpayers are taking. It's more or less off balance sheet. Fannie Mae and Freddie Mac are not included in the White House's budget. Despite the $6.3 trillion in liabilities they possess which could be dumped on the public, these financial anchors aren't in the budget. Just think about that the next time some official is bragging about bailouts working. TARP has become the President's personal piggy bank and Fannie and Freddie (along with Ginnie Mae, VA, and FHA) are backing all new mortgages, including very high risk stuff. Of course, if you scare the private sector out of a business it leaves it all to the government.
A few quick thoughts:
Much has been reported and commented upon, regarding Fannie Mae and Freddie Mac. Whether the outrage is commensurate to the issue is a matter of taste and political persuasion.
I definitely think Fannie Mae needs less stately digs -- makes a very bad impression on the average home owner and taxpayer.
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