Whatever the fix, the money spent will not be recovered, said Alex Pollock, a former president of the Federal Home Loan Bank of Chicago who is now a fellow at the Washington-based American Enterprise Institute. “It doesn’t matter what you do or don’t do, Fannie and Freddie will cost a lot of money,” Pollock said. “The money is already lost. There’s an attempt to try to avert your eyes.”
Quoting Sen. Gregg, here is the herd of elephants in the room, (no mention of these two in the Dodd financial reform bill):
June 14 (Bloomberg) — The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.
Fannie and Freddie, now 80 percent owned by U.S. taxpayers, already have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund. That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts.
“It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.
WASHINGTON (AP) – Fannie Mae has again asked taxpayers for more money after reporting a first-quarter loss of more than $13 billion.
The mortgage finance company, which was rescued by the government in September 2008, said it needs an additional $8.4 billion from the government to help cover mounting losses.
Fannie Mae says it lost $13.1 billion, or $2.29 per share, in the January-March period. That takes into account $1.5 billion in dividends paid to the Treasury Department. It compares with a loss of $23.2 billion, or $4.09 a share, in the year-ago period.
The rescue of Fannie Mae and sister company Freddie Mac is turning out to be one of the most expensive aftereffects of the financial meltdown. The new request for aid will bring Fannie Mae’s total to $83.6 billion. The total bill for the duo will now be nearly $145 billion.
Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.
Fannie and Freddie play a vital role in the mortgage market by purchasing mortgages from lenders and selling them to investors. Together the pair own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages. (emphasis mine)
“The federal debt stands at $8 trillion. But the Fannie Mae, Freddie Mac, and Federal Home Loan Bank debt stands at $8 trillion as well,” Anthony Sanders, a real estate expert from George Mason University, told the recent House hearing. Together, those debts are greater than a year’s gross domestic product, which he called a “Grecian Formula” of debt issuance to fund housing goals.
A solution to the thorny problem of housing-market finance is notably absent from the financial reform bill now working its way through Congress.
Late last week, I put up the video of Jean-Claude Trichet, the president of the european central bank speaking to the CFR about creating financial rules for the entire global finance community all the way down to the local level. As if these asshats had not already done enough damage by tying economies together on a global level ‘to prevent war’, they must really believe that the American taxpayer is that ‘money tree’ that anybody and everybody needs to be able to access.
WE did not want to bailout our own banks and car companies, why would any of us think that it is perfectly acceptable to keep ‘giving’ money to the World Bank and IMF to save other countries economies? The elites that have been running us down the garden path have no concept of the ebb and flow or the balance that is a natural law.
Welcome to ‘Greece Is Too Big To Fail’.
We must guard against the whiplash that could ensue when we extricate ourselves from the UN, the IMF, the WB, and the central banks.
GM is receiving the AYFKM? NOW Award for trying to sell America the lie that they are out of danger and are on their way to a total fiscal recovery. How many of you believe that they paid back their bailout five years ahead of time? How many? How many knew it was a lie when it came out of the CEO’s mouth?
The majority of Americans play by the rules and believe in playing by the rules. I personally stated that I would never buy another American made car again after GM broke their word on a warranty and an extended warranty for a POS truck they produced, and which I spent more money repairing than the actual vehicle cost because my conscience would not allow me to trade it or sell it to some sucker. I know there are many more stories just like mine, and just like me, those Americans are not rewarding failure – we could not afford it 5 years ago, and we definitely cannot afford it now.
Do capitalists on steroids exist? Why yes, Wall Street just gave us a rousing rendition of ‘greed’. Does it make it okay for the rest of us to act like them or their 180 degree counterparts, the leeches on the government dole? Nope!
The majority of Americans are your garden variety, free enterprise loving, do the right thing, capitalist. So when Bush and Bush II Obama decided to negate free enterprise rules and bail out the banks and car companies, we were melting the phone lines in DC telling them, (in this order), NO!, DON’T YOU DARE!, and STOP!. They heard us, wrote their little patronizing letters to us, and then continued on their merry little way rewarding failure. We knew that we would never see that money again, so it is little wonder that we are once again not rewarding failure, (like we didn’t for the last two decades which would explain why the Big 3 were going under), when it comes to GM and Chrysler. Ford did the right thing when they refused bailout money, and they are being rewarded for pulling themselves up by their bootstraps. Now Ford has a chance to listen, really hear, and become an industry leader instead of chasing the foreign imports. GM and Chrysler? Not so much…
DETROIT (Reuters) – U.S. auto sales tumbled by more than 20 percent in September as showrooms emptied after a government-funded summer sales boom and Ford Motor Co gained ground on its major rivals, sales figures released on Thursday showed.
Sales for General Motors Co and Chrysler — the two U.S. automakers struggling to regain momentum after emerging from bankruptcy — tumbled by the deepest margin in September.
GM sales dropped 45 percent while sales at Chrysler were off 42 percent.
Ford, meanwhile, managed to hold its sales decline to 5 percent despite low inventories and sharply reduced spending on incentives. It estimated that it gained 3 percentage points of market share to 15 percent of the U.S. market in September.
Hyundai Motor Co, which has taken market share through the U.S. recession on a growing reputation for low-cost and high-quality vehicles, saw its sales jump 27 percent in September.
Why would Americans continue to pay good money for sh*tty cars, even if we do own the car companies now? We wouldn’t; we already kissed that money goodbye, and we will finish the process the government interferred with because brand loyalty is, now more than ever, a luxury.