Fannie Mae reports third quarter loss of $18.9 billion and requests another $15 billion in taxpayer funds.
Another government enterprise comes back to the well for more, with no end in sight. Bloomberg has a summary of the results here. FNM was the organization that couldn’t do accounting properly several years back. Based on inaccurate numbers, they paid government-hired cronies huge bonuses. There is little doubt in my mind that this accounting is also wrong, but for different purposes. The government cannot release the real numbers. I believe they would be terrifying. As Joe Weisenthal states: “Just to be clear, Fannie Mae (FNM) is still a total sinkhole.” Unfortunately this coverup, along with other policies, will result in much larger taxpayer losses.
One of the other policies was announced yesterday. Fannie intends to turn borrowers into renters. Billed as a way to assist homeowners (it will subsidize some of them with taxpayer money for about a year), I believe it is just another trick to defer recognizing losses. Karl Denninger agreed with a scathing post yesterday. He described it as just another “scheme after scheme, scam after scam, all intended to do one and only thing – avoid a true and accurate accounting of losses that have already occurred.”
Freddie Mac is with Fannie in receivership. The FHA is now being used by Washington to try to prop up the housing market. There have been innumerable articles regarding how they are soon to become the next FNM. Here is just one. A recent post on this blog discussed how the FHA would be the next major bailout.
Folks, these are terrible times, unnecessarily being made worse We are not having an economic recovery, the stock market is filled with helium and most of the banking system is probably not savable. Rather than face up to reality, the government is trying to bluff its way through. In the process, the government has become a gigantic Black Hole that is absorbing the private sector, jobs and incomes (now and future). Matters are worse now then when the crisis began and will be worse six months from now. There will be no economic recovery as a result of anything that has been done thus far. These policies are lowering our standard of living and impoverishing the nation. They must cease.
Related articles by Zemanta
- Fannie, Freddie and FHA Loan Limits Will Be Extended Through 2010 (zillow.com)
- Another Government Mortgage Entity Is Blowing Up (themoderatevoice.com)
- Peter J. Wallison: Barney Frank, Predatory Lender (online.wsj.com)