Bankrupt Fannie Gets Even More Bankrupt, Announces May Not Survive

Tyler Durden's picture

The bankruptcy of America is getting borderline hilarious, even as stock capitalization surges by about $1 trillion based on funny money to be printed by the ECB with the Fed's assistance. In the second coming of moral hazard, one piece of news that some may have missed is Fannie Mae's earlier announcement that the mortgage lender is now more bankrupt than ever before - the firm lost $13.1 billion in net income on $3 billion in revenue. "The first-quarter loss resulted in a net worth deficit of $8.4 billion as of March 31, 2010, taking into account a $3.3 billion reduction in our deficit related to the adoption of new accounting standards, as well as unrealized gains on available-forsale securities during the first quarter. The Acting Director of the Federal Housing Finance Agency has therefore asked Treasury to provide us $8.4 billion on or prior to June 30, 2010." Additionally, the Fed backstopped entity also announced that "there is uncertainty regarding future of
business after conservatorship terminated and expect this uncertainty
to continue."
But since in America asset prices have not reflected fundamentals in over a year, nobody gives a rat's ass. And the political whores in DC feel like beating up anyone who even dares to mention this particular $7 trillion dollar question mark which is equivalent to 50% of total US debt, so expect no reform to happen here, just like nothing happened with HFT, until the markets hits 1 quadrillion or zero. For all intents and purposes, the two outcomes are equivalent.

Full Fannie press release.

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Betty Swallsack's picture

....and let us hope that does not spawn references to a bad Madonna song.

fuu's picture

I was already on my way to youtube.

ambrosiac's picture

We may all be on our way to La Isla Bonita

 

...or somewhere

bugs_'s picture

"I don't want to go on the cart."

"Oh, don't be such a baby."

...

"I think I'll go for a walk."

"You're not fooling anyone, you know"

Al Huxley's picture

+1.  I also like 'even more bankrupt'.  That's like being 'even more dead'.

sweet ebony diamond's picture

in this age of zero accountability, why do they release this information?

i want happy faces.

johngaltfla's picture

Dear IMF,

Our Fannie and Freddie are sore.

Please send money.

Love,

Uncle Sam

Wynn's picture

What happened to the blog links on the left side?

Cognitive Dissonance's picture

Which left? Your left or my left?

Oh, that left. Yup, they're missing. Very interesting. Lot's of blank real estate to be filled there.

Janice's picture

I am a Southerner...my grandfather had a saying...Throwing good money after bad.

Miss Expectations's picture

I'm a Northerner.  Moved South 4 years ago.  I understand the Southerners have another saying (concerning new-comer Yankees):  Bag of money/Box of Stupid.

Janice's picture

I've never heard that one.  My family is/was so far back in the Florida woods that if you were new comer, you were automatically shot or beaten because it was believed that you were a damn revenuer.  Guilty till proven innocent.  Boy, do I have the stories.

Cognitive Dissonance's picture

"Boy, do I have the stories."

Janice. Do NOT tease us like that. One a week, even if you have to make them up.

Hulk's picture

From Va, not exactly south, but south of MD. The sun don't shine on the same dogs tail forever. My families variant on this was: The sun don't shine up the same dogs asshole forever. meaning that you get what you deserve....

In a coons age  is another good one meaning a long time..

Double down's picture

Two comments on this thread, you are right.  Unfortuately a dead issue 

ZackAttack's picture

I'd have a lot more respect for monetary authorities if they'd show they had the balls of fieldmice by renaming Frannie "The Resolution Trust Corporation 2.0", putting a dollar figure in front of Congress, getting it funded and selling off the bad assets.

 

Can they at least *pretend* to be men and do something in the light of day for once?

ghostfaceinvestah's picture

Fannie and Freddie are nothing more than wealth transfer vehicles from the taxpayer to the banks.

MarketTruth's picture

No worries, the Fed is deep into Fannie so they'll just buy more at 100% face value. Legal, who cares because the Fed does not care about legalities any longer.

IMHO:
Short paper junk after this rally.
Go long physical gold.

 

jkruffin's picture

Start buying that GOLD and SILVER folks.....start buying!

FEDbuster's picture

First get an AR or AK and 1000 rounds of ammo, and as much food as you can store.

spanish inquisition's picture

Gotta get me a frame for a sheet of the new B (billion) notes. Do you think they will design one or just go for the overprint? I hope they use a gold color, that will set off the green seal nicely and go with my livingroom decor

Our two weapons are fear and surprise...and ruthless efficiency

Miss Expectations's picture

I give a rat's ass:

The Good Rats (from Rat City in Blue)

"Almost Anything Goes"

http://www.youtube.com/watch?v=Pt96_49h1Cg&feature=PlayList&p=795C51FA93...

Common_Cents22's picture

John Paulson said he is expecting housing to rise 3% to 5% in 2010 and 8% to 12% in 2011, CNBC reported Monday. 

 

Now that Paulson is on the radar, is he copying Soros and GS in publicly zigging while he is privately zagging?    Or has Paulson been co-opted by the machine?

Looks like the party will continue til 2012 when the obama admin inherits a shit sandwich and supersized it to leave us a tripleshit sandwich?

Rainman's picture

These two bad banks are simply fulfilling their destiny. The Xmas Eve taxpayer massacre was all about unlimited backstop. Worthless fiat needs no limitation from here on out.

jkruffin's picture

Didn't the Senate just pass the part of the bill " No more Too big to Fail"?  Didn't they say there would be no more bailouts?  So how does FNM and FRE just keep coming for more money every quarter?  This is becoming lunacy at its finest.

Steaming_Wookie_Doo's picture

Yeah, well, the senate said they were going to audit the Fed too, but that got shot in the ass pretty quickly. Who will enforce the No More TBTF? It appears all supposed "adults" supervising this have completely caved in to TBTF interests.

I agree, it is Alice in Wonderland with a Monty Python twist kind of looney.

 

theprofromdover's picture

If you can still freely default on your house, no reason why house prices don't start going up again. You just have to make sure your equity in the property is buttons. Maybe you'll even be able to buy the distressed property outright once a realistic default value has been appraised.

........ well, the entire system is kaput, might as well start playing new games.

Steaming_Wookie_Doo's picture

One question that's not clear is what happens to the "assets" that Fannie is holding. If a bankruptcy happened, what would become of those assets? Is the Fed or the Treasury the owner of Fannie?

metastar's picture

Wait for the plates to stop spinning sometime around election time.

thomas_anderson's picture

You can keep kicking the can down the road...until you run out of road.

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