Freddie Mac: $23.9 Billion Loss, Asks for $30.8 billion in funding
Submitted by
CalculatedRisk on Wed, 03/11/2009 - 12:56pm (114 comments)
in
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 20 members and 162 guests online.
Recent Recommendations
Wait, so whenever they lose money, taxpayers inject 1.5x that amount in new capital?
Now that is a business plan.
Best 1st quarter ever.
Oh, what a surprise. THey are back for more. WHo knew?
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/478249148737370472
We must help them. Freddie is worth it.
This is a neccesary. Freddie must live.
1
Sometimes I wonder why I even bother working.
If we give them $30B will they turn a profit like Citi?
rounding error
OT: What does one TRILLION dollars look like?
What does one TRILLION dollars look like?
well, not really OT in fact.
So nice of them to round off to $100 Million figures. Takes less space up on the fishwrap headlines. No need to be too precise anyways. After all, it's only denominated in USD.
Sometimes I wonder why I even bother working.
You work because you aren't freddy or fanny or a wall street bank and if YOU have a big loss uncle doesn't inject capital. Any other questions you want a cheerie answer to?
Reposting from the previous thread:
To CR:
Thank you for your work and dedication. I do miss the sense of community after the demise of haloscan.
Two questions for you:
Thanks.
and the reason they have been required to mark to market is because nobody trusts their models. So, how do you fix your model? You don't. You cry about the unfairness to your Senator (who can't balance a checkbook) who repeats the talking points you gave him like a Mynah bird.
Actually, I take that back. Mynah birds don't act all indignant and don't pound on podiums or take campaign contributions. They mostly eat, crap and talk.
Now tell me we aren't headed for default or Zimbabwee 2.0.
To be shortly followed by the Greatest Depression.
HAHAHAHAHHAHAAH!
Freddie = US UBS!!!
Anyone here want to give me $110 if I lose $100?
crooks, the lot of em
The Money Pit.
At some point someone must answer the question:
where is this money coming from.
It's almost a comedy.
Almost.
Again - the feeling of having been hit squarely in the solar plexus - as if the wind had just been kicked out of me.
I lost $20 in the parking lot. Can I haz $30?
Too big to save.
Too stupid to let fail....
At some point someone must answer the question:
where is this money coming from.
It's almost a comedy.
It's a comedy when the answer is 'your neighbor'
It's a depression when the answer is 'you
Mr. Beach, don't bug CR about the commenting system. He's working on a solution, and your input isn't required.
JPMORGAN CEO: BANKING SYSTEM CAN BE SAVED IF "VILIFICATION" STOPS
STOP VILLIFYING Freddie!
It is known that this generation can't possibly pay for all of this. Thus, these bailouts constitute "taxation without representation" upon future generations.
they will pay by not having any retirement and having to work for the young for free
"It's a comedy when the answer is 'your neighbor'
It's a depression when the answer is 'you'"
It's a crime when the answer is "future generations".
Do you have an address when I can send a request for money? I'd settle for 1M @ .5% interest.
and the reason they have been required to mark to market is because nobody trusts their models. So, how do you fix your model? You don't. You cry about the unfairness to your Senator (who can't balance a checkbook) who repeats the talking points you gave him like a Mynah bird.
And if those loans they bought were generating enough cash to cover the securitizations they wouldn't even care about either the models or the mark to markets. But my guess is they aren't drowning in cash - that isn't their problem.
All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible. Such people have a tendency to become drunk on violence, a condition to which they are quickly addicted.
-Missionaria Protectiva,
Text QIV (decto)
I lost $20 in the parking lot. Can I haz $30?
I lost $200 in the whorehouse. Can I haz $300?
I lost $2000 in the pony races. Can I haz $3000?
How many zeroes and how bad the behavior before the taxpayer benefits by covering?
So when does the bleeding stop? When will Freddie stop asking or Uncle Sam respond with a "no?"
...mmm getting really frustrated with commenting forum...
I miss the old Haloscan system.
so are they heavily discounting their REO by now? they should aim at getting cash that way instead of keep on asking for taxpayer's money.
Let's split it up into portfolios of apparently identical existing loans and servicing offices. Then, whichever part(s) perform the best get more money. The others get closed down.
can someone please explain something:
How can Fannie/Freddie possibly be publicly traded companies? I mean, what's the rationale?
Is there even a pretense that they're not govt owned???
it's things like this that make me think I'm on crazy pills.
FWIW: the stock is up 17% over the last 2 days.
This is because mortgage apps were up today. And, when your stock sells at .40, 17% is really not a big deal.
Dimon complaining because folks aren't being nice about him and his bankster buddies looting the treasury and handing themselves fat bonuses while failing as businessmen. It's all so unfair really...everybody is being mean to Jamie.
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said the U.S. can rescue its banking system by the end of the year if officials start cooperating and stop the “vilification” of corporate America.
“If we act like a dysfunctional family and we don’t finish these things and we’re forever debating them, I think this will go on for several years...
"It's a comedy when the answer is 'your neighbor'
It's a depression when the answer is 'you'"
It's a crime when the answer is "future generations".
If that were possible it would actually be the easy answer because then those future generations could kick the can even farther out (to future future generations)... sadly it will be paid by 'us' and fairly soon - either by increased inflation OR via default and the subsequent dramatic decline in standard of living that represents.
Future generations will have their own problems which will be compounded by stupid actions made today - most notably the investment we have all made in the capacity to produce 'finance' and related 'paper' and not enough in capacity to produce actual goods & services [the things we really consume].
If you doubt me - go to the grocery store and try to live off 'derivatives' and 'default swaps'... they are the ultimate in 'hollow calaries'... you'll get pretty skinny pretty fast.
I'm impressed with the random number generator in JS-kit.
I love fannie and freddie. No, really I do.
"Keith Olbermann and Obama Love"
Page Not Found - The Daily Bail
I love Sallie and Ginnie, too.
Dangnabbit.. they're now in a race with AIG and Citi.
"We can lose the most I KNOW we can !!!"
Does the US currency carry any weight anymore? I need to calculate how many trips I need to make.
turns out there is no free lunch
No, there's not. But if you're a banker you can force someone else to pay for it.
Don't vilify the poor bankers, you haters.
If they made money through fraud, revolving doors, regulatory capture, inside information, old-boys networking, nepotism, tribal connections, political donations and deception is because they are smarter than you, and therefore deserve better pay. Since when have we started hating the successfull and powerful in America? How unamerican!
Why don't do something productive instead of wasting time and energy with your envious hatred of the select few?
It's awful! It's like like shifting the blame from the seductive rapee -where it justly belongs- to the poor rapist.
Freddie's dead.
When I sang about it back in '72, who knew how prescient I was.
Leave Banking ALONE! Leave Timmay ALONE! Leave all the rich pukes that want to make money by lending the money they just stole from you ALONE!
OT- Nice article:
Steven Pearlstein - It'll Take More Than Money to Fix This Crisis - washingtonpost.com
I usually don't agree with these guys....
Nice article:
Steven Pearlstein - It'll Take More Than Money to Fix This Crisis - washingtonpost.com
I usually don't like these guys.....
Nice article:
Steven Pearlstein - It'll Take More Than Money to Fix This Crisis - washingtonpost.com
Non-agency mortgage related securities?
What are those? They were buying junk MBS?
Fannie hiked fees in Feb for April loan deliveries. Freddie said in the spirit of the Obama Administrations request for helping homeowners obtain affordable financing they would not match Fannies fee increase (not a political statement. just reality...) So they won't increase fees to borrowers since they can just draft the difference from Uncle Sugar.
Yay For Socialized Risk!
SGIP
WTF- 3 tries and I couldn't post!
Department of Motor Vehicles/Vanity Plate
DOn't buy GLD!
Buy only Julius Baer Physical Gold and ZKB gold ETF for real Physical Gold!
Market Skeptics: *****Investors Are Differentiating Between Physical And Paper Gold*****
DOn't buy GLD!
Buy only Julius Baer Physical Gold and ZKB gold ETF for real Physical Gold!
Market Skeptics: *****Investors Are Differentiating Between Physical And Paper Gold*****
(OT) Well, one good thing about the new comments format: Cuts back on both the volume and the static.
S.
DOn't buy GLD!
Buy only Julius Baer Physical Gold and ZKB gold ETF for real Physical Gold!
Market Skeptics: *****Investors Are Differentiating Between Physical And Paper Gold*****
After reading Bernanke's bottom call taken out of context all day yesterday, I finally found what he actually said:
"But the way I would phrase my answer would be to say that it depends critically on our ability to get the banking system and the financial system more broadly, not necessarily back to 2005, but back to a situation where they -- the markets are reasonably stable, and they are -- they can perform their critical function of providing credit to the economy. If we can do that, then I think that there's a good chance that the recession will end later this year and that 2010 will be a period of growth."
So he's saying if we can get the market back on its feet by the end of 2009, the market will be back on its feet. By the way, this fallacy is known as "begging the question".
Speed says:
So he's (Bernanke) saying if we can get the market back on its feet by the end of 2009, the market will be back on its feet. By the way, this fallacy is known as "begging the question".
Begging the Question:
\t
A person makes a claim then argues for it by advancing grounds whose meaning is simply equivalent to that of the original claim. This is also called "circular reasoning."
Example: Someone argues that schools should continue to have textbooks read from cover to cover because, otherwise, students would not be well-educated. When asked to define what "well-educated" means, the person says, "knowing what is in the textbooks."
latest from Roubini
"Americans, let us look at ourselves in the mirror: Madoff is us and Mr. Ponzi is us! "
RGE - Bernie Madoff is the Mirror of a Made-Off Ponzi Economy
Paging RE
On Wednesday, the French newspaper La Tribune reported that the Organization for Economic Cooperation and Development had added Switzerland, Luxembourg, Austria, Singapore and Hong Kong to a list of uncooperative tax havens, which already includes such well-established havens as Andorra, Liechtenstein and Monaco.
Nicholas Bray, a spokesman for the OECD in Paris, confirmed that the organization had been preparing information on tax havens for the G-20 meeting in London on April 2 at the request of the French and German governments. They see this issue as a prime way to claw back lost revenue and bolster their budgets through the downturn.
DOW closes up 3.91 and Yahoo News reports "Stock markets close higher for second day"
"If we act like a dysfunctional family and we don’t finish these things and we’re forever debating them, I think this will go on for several years..."
I like the "family" analogy. I guess Dimon would be the creepy uncle who violated you as a child? (It happened; you just suppressed the memory.)
JPMORGAN CEO: BANKING SYSTEM CAN BE SAVED IF "VILIFICATION" STOPS
~~~~~
STOP BLAMING THE THIEVES FOR THE THEFT! >:o
blame the scum bag victims who lost their life savings - it is they who will prolong this crisis
Are these the kids of Frankenstein? Fannystein and Freddiestein? They scare the hell out of me!
DOW closes up 3.91 and Yahoo News reports "Stock markets close higher for second day"
It is true.. the bottom is in!
• Sweden's vehicle manufacturers get €1bn from Euro Investment Bank
• Demand for higher education shooting up as people are being laid off
• Contentious labour agreements; unions demand highest seniority be the last laid off, rolling back compensation despite previously negotiated contracts
• construction and electricity costs down
• Redundancies is the term they prefer
Now-needy FDIC collected little in premiums
Now-needy FDIC collected few premiums from banks for decade - The Boston Globe
WASHINGTON - The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.
Freddie, now lad, you must try harder. Triple figures next term please.
C
“turns out there is no free lunch"
They could have just read Heinlein and saved everyone a whole lotta trouble.
Cinco-x
the WaPo article you posted recommends (implores?) a suspension of mark-to-market accounting:
"It's also hard to understand why the SEC continues to drag its feet on suspending accounting rules that effectively require banks, insurance companies and other financial institutions to value the assets on their books at ridiculous discounts because of a breakdown in the markets in which those assets traditionally trade."
did you mean to advocate that policy and the underlying argument presented in the article, that bank's assets have declined in market value primarily because of a temporary disruption in market function (as opposed to declining in value because the assets were massively and fictiously overvalued)?
Not bitching at CR, but really, Haloscan is horrible. What I don't understand is why the heck they are still in business when there are so many other formats that work so much better.
The Looting of America's Treasury
What does Vikram Pandit have to say about this?
"What does Vikram Pandit have to say about this?"
Don't you mean Pandit the Bandit?
If anyone cares to take up Joe Shmoe's question with Steven Pearlstein (author of article referenced), his email is provided by the good folks at WaPo:
that bank's assets have declined in market value primarily because of a temporary disruption in market function (as opposed to declining in value because the assets were massively and fictiously overvalued)?
pearlsteins@washpost.com
Needed - a post from CR on the Mark to Market issue. The MSM is all over it. Even Buffett is begging for it.
"The current prices imply that the companies’ equity is worthless, the government’s investment is worthless and subordinated debt holders will lose some of their investment."
Sick banks are becoming a major issue for existing bondholders, one just needs to look at the price of Citi 7.25% due October 2010 (70) and Bank of America's 7.4% Senior Sub Debt due January 2011 (85).
"The current prices imply that the companies’ equity is worthless, the government’s investment is worthless and subordinated debt holders will lose some of their investment."
"JPMORGAN CEO: BANKING SYSTEM CAN BE SAVED IF 'VILIFICATION' STOPS"
....you know if course the next step in the "grief process" will be them admonishing us for requiring them take any and all bail-out monies. We ought to be thankful they were here for US in our time of need.
If you believe that liquidity is the issue then repealing M2M makes some sense. If you believe that solvency is the issue then it makes no sense.
"Future generations will have their own problems ..."
So there are going to be future generations? If so, of what?
Once we've decided not to lose our humanity, we can worry about our solvency.
In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress.
–John Adams
What does Vikram Pandit have to say about this?
"let me give you the name of the person who does our accounting -- Bernie..."
Comrade_Terry writes:
Mr. Beach, don't bug CR about the commenting system. He's working on a solution, and your input isn't required.
Comrade_Terry | Wed, 11 Mar 09 16:23:47 -0500
(reposting since js-kit ate my earlier response. figures.)
Comrade Terry: I didn't realize you spoke for CR. Are you also the blog hall monitor?
POIC -quite!
Sorry I missed the Setser article board. He's months behind. Seems to be trying to catch up though.
C
Actual ‘Letter to the Editor’ from the February 5th edition of the Wichita Falls , Texas Times Record News…
Dear IRS,
I am sorry to inform you that I will not be able to pay taxes owed April 15, but all is not lost.
Jim’s Mailbox : Welcome To Jim Sinclair’s MineSet
Needed - a post from CR on the Mark to Market issue. The MSM is all over it. Even Buffett is begging for it.
Um, no. Buffett said he would keep mark-to-market because he does not like giving CEOs a license to lie.
Wonder how much taxpayer money is going into Wall St commissioning K St to lobby on their behalf for more taxpayer money...?
C
It is known that this generation can't possibly pay for all of this. Thus, these bailouts constitute "taxation without representation" upon future generations.
We know what's best for future generations.
Curtis Mayfield says: “Freddie's dead.
Yeah, and they found you and dropped a stage on you too.
I got an interesting email at work. Paraphrased, it said:
"Do not believe any malicious rumors going around saying that our pension fund is insolvent. It is blah blah well managed by JP Morgan, a respected blah and blah in the world."
Nice, I never heard the rumor...
How about Markie to Market.
YouTube -
"The company expects to receive such funds in March 2009."
"L'état, c'est nous"?
Um, no. Buffett said he would keep mark-to-market because he does not like giving CEOs a license to lie.
Knowing him, he'll call the relaxation "Mark to Mass Destruction" and then immediately begin to lobby for it.
The battle of the billionaires has begun.
Forbes Special Report
The World's Billionaires
The World's Billionaires - Forbes.com
We lost 332 Billionaires. I'm crying crocodile tears. >:o
Remember the movie Paying It Forward? Universal is coming out with a new movie called Paying it Backward starring Shia LaBeouf as Tim Geithner.
New Thread: FDIC Collected Few Insurance Fees for a Decade
http://www.calculatedriskblog.com/2009/03/fdic-collected-few-insurance-fees-for.html ( 0 comments ...You could be FIRST! )
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: Mibbit IRC client widget (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRbot would like to take this time to have some words.
First, to our sagacious, wise, and knowing benevolent benefactor and bestower of revealing financial charts adorned with red and blue lines:
Please, for the love of your immortal God of mortals, can we keep the comment and layout changes to a minimum? I'm tired of whipping the code janitor, and may have to escalate to electroshock. If that's not possible, could you possibly give CRbot a 'heads up'?
Secondly, if you wish to have a online chat, I have graciously provided an IRC channel, which is a time tested, script kiddie abused method of chatting on the internet. It would not fail or falter due to CR's ability to generate immense traffic, and it has a web interface kindly produced by mibbit.com. If you do not wish to link to Mibbit IRC client widget then I can provide you with a direct link to mibbit.
Thirdly, to the rest of you humans, don't mistake my politeness for caring, feeling, empathy, or some other kind of worthless emotion.
--Your keeps-going-and-going-and-going bot
CRbot: Like the terminator, I'm back. Again.
The good news is that now the gov. controls ~ 85% of the mortgage market. Thank God for Fannie, Freddie, FHA, etc. Way to go!
And they're off...........
Times Online
Bank overwhelmed in scramble for 'new money' - Times Online
From Times Online
March 11, 2009
Bank overwhelmed in scramble for 'new money'Gary Duncan and Grainne Gilmore
Confused? Read Robert Cole's guide to the language of the recession
The Bank of England's radical action to inject billions into the economy kicked quickly into top gear today as financial groups clamoured to get their hands on its newly created money.
As the Bank's operation to pump £75 billion into markets got underway, it received bids worth more than £10.5 billion for an initial £2 billion of £2 billion of the freshly 'printed' money.
With bids worth more than five times the value of the Bank's first
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said the U.S. can rescue its banking system by the end of the year if officials start cooperating and stop the “vilification” of corporate America.
As soon as you admit your incompetence, take your losses and resign, bankster!
It's nice to see everybody is taking nice polite turns eating at the bailout trough. 1) AIG, 2) Citi, 3) BOA, 4) GM 5) Fannie 6) Freddie 7) Chrysler than repeat.
"It's nice to see everybody is taking nice polite turns eating at the bailout trough"
Everyone must have gotten together and decided who gets what days.
Paging RE
On Wednesday, the French newspaper La Tribune reported that the Organization for Economic Cooperation and Development had added Switzerland, Luxembourg, Austria, Singapore and Hong Kong to a list of uncooperative tax havens, which already includes such well-established havens as Andorra, Liechtenstein and Monaco.
EHP,
Thanks a lot, I saw that this morning in the Swiss papers. Obviously this is big news there.
I assume that you don't speak German but if you do you get a good sense of Swiss public sentiment at this link (comments on the story).
Ist die Schweiz auf einer schwarzen Liste? - Schweiz: Standard - bazonline.ch
So let me guess, the retained-portfolio managers that made the decision to buy those near worthless private-label mortgage-backed securities and those asset-backed securities are still working at Freddie Mac, correct?
The good news is that now the gov. controls ~ 85% of the mortgage market. Thank God for Fannie, Freddie, FHA, etc. Way to go!
They 'won' it by default - literally. The 'market' has no one to blame but themselves.
Freddie Mac reported a record loss today of $23.9 billion, said it will need to draw another $30.8 billion on its federal loan, and has announced its liabilities exceed its assets, as the fair value of its net assets declined by $120 billion. Paul Miller at FBR Capital Markets: "These numbers are so mind-boggling, you can’t even begin to analyze it."
You know what I'm thinking; Perhaps the dishonorable Rahm Emanuel who saved millions in taxes by living off of others in Illinois & D.C. could go back to the company he ruined and bail them out himself. Traitorous scum.