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Question: What Do You Get When You Mix "Do Good" With "Someone Else's Checkbook"?
Answer: Negative One Hundred Billion Dollars.
That's a rough estimate of operating losses at Fannie Mae in the last six quarters. It should be obvious to anyone paying attention that no entity without direct government patronage or some other means of insulating itself from the real world would be permitted to destroy value with such abandon before some radical intervention was imposed. Remember that car company, the one we got all up in arms about after "massive losses." We turned off the spigot (sort of) on that one after a "mere" $29.7 billion loss in six quarters.
(source: Bloomberg)
So why is it that with three times the losses in the same relative time period we are even discussing handing Fannie $15 billion more to toss to the four winds of "the right thing to do"? That it is even brought up as a possibility should literally offend the senses. What other firm in "conservatorship" would ever be permitted a sustained multi-billion dollar loss like this? Perhaps the "conservator" has some other idea about the meaning of the words "conserve" or "conservation" than the rest of the planet. (Perhaps he/she is part of the green movement?) Oh, wait...
9/7/08: US GOVT ASSIGNS FHFA (The Federal Housing Finance Agency) TO ACT AS CONSERVATOR. [Bloomberg]
...never mind.
(source: Bloomberg)
The answer to these questions is actually quite obvious. Fannie, and its cohorts, are not firms. They are literally policy instruments of the federal government and, more recently, the Federal Housing Authority- newly christened as the latest "lender of last resort". By the way, if you don't appreciate the irony in a term like "lender of last resort" in an environment where the government can create new ones at will, well, we're not sure quite what to do with you. We also aren't quite sure when these entities will hit the Chandrasekhar limit and begin sucking the rest of the economy through the event horizon of sovereign default, but the warping of financial space-time nearby suggests that we are getting close. Then again, objects near the event horizon can appear frozen due to time dilation. Perhaps we've passed it already.
Whatever the case, this must finally end. Let's hope it is not in tears... or in the dollar's rapid spaghettification. (Oops. Too late)
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Hey Marla! It's Bank Failure Friday! What do you have on deck for us this weekend? Perhaps a set that celebrates the regularity of announcing bank implosions after the newshounds have all gone home for the weekend would be appropo.
I am Chumbawamba.
I think that would be nice, good for the digestion!!
BTW 13 Banks tonight....
9 banks / $ 900 million hit to the DIF
here's my over-under
7 banks / 2 states
2 states, huh?
How about 2 cities a few counties and ...ok...2 states.
Baltimore and Houston will eventually concede they are toast - pensions gonna swallow them whole.
Time for bonuses all around!
I'll be on the next plane!!
OK, I'll embarrass myself once again and ask the question.
Where is the outrage?
It got shorted. What is the cost of CDS on outrage these days anyway?
I am Chumbawamba.
Tough to mobilize a country that's on the dole...Bottom feeders feel great..
Example. Safelink cell phones free if your on welfare or food stamps.+100 mins free....Are you sick yet..
https://www.safelinkwireless.com/EnrollmentPublic/home.aspx
haha, wow, life is too fucking weird lately.
Yes, I just puked after reading that. And in my zip code it's only 68 free minutes/month.
It's past time to "go Galt." Could we be the first country where the underground economy is the well-educated, skilled and mostly financially better off people?
Only 68 mins in your zip, hummmm Must be an upscale neighborhood.
Because... let me get my cheat sheet selling points... came directly from Larry Summers... Diet Coke stain and all... ah... here you go Ms. Singer... "we are handing Fannie Mae whatever it needs, because if we didn't do it there would be Financial Armageddon all over again".
Don't you know that there's a $ ba-jillion in interest rates swaps riding on this??? Do you want the collapse of the Interest Rate Swap market-- and by extention-- the core of out financial system-- to totally unravel?
Why am I asking these questions????
Good one.
"What are we supposed to do? Nothing?!?!"
The govt is propping up Fannie and Freddie (and the FHA) because that is their back door way to own a significant portion of the housing stock in this country.
Bingo!
Bingo, x2. And I think the Fed's indirect purchase of the whole stock market is with similar aims. America's going to wake up from its coma in a few years and find that it's a new fascist/socialist hybrid with a small coterie of banksters owning and running everything.
Perhaps, but remember the Soviet Union.
They owned everything and it all collapsed anyway.
i agree ghost..i believe what is happening is completely intentional and has nothing to do with safe guarding the financial system. the new 'deed for lease' program is another example of the eventual ownership of the majority of america by the government. both real estate and the financial system. if anyone watches glen beck, he made the case last week that we can't and won't pay off our debts to the chinese, but what our government will have as collateral will be gold, real estate, oil and our banking system. just keep watching how everything our government is doing is the slow process of accumulating collateral.
Oh, well if Glenn Beck says it's true then it must be. Anyone who gets paid to shill for the corporatist elite on Fox News has my confidence and respect.
I am Chumbawamba.
All headed for Neo Feudalism..
Are we all the victims of a neo-con?
Samuel P. Huntington Clash of Civilizations, PNAC We need a catalyzing event,
Now thats a rouges gallery....
"Today, we are all potentially a HOMO SACER, and the only way to prevent actually becoming one is to act preventively." -slavoj zizek
http://en.wikipedia.org/wiki/Giorgio_Agamben#Homo_Sacer:_Sovereign_Power...
It's so incestuous, asinine and surreal, it's more like Family Feudalism with B.O. as the game show host
http://www.youtube.com/watch?v=zdVuEpD9_IY
There has never been a people being F&^%$# up this badly and with all the necessary information to know what is going on and who is doing it... Honestly, WHAT IS WRONG WITH THE US CITIZENS??????????????????
Well, when someone like Glen Beck has a mass following then what do you expect? When someone like GW Bush can not only get elected for president, but then re-elected, what do you expect? When a mediocre boob like Obama can get elected president because he has adequate diction, what do you expect?
I mean, seriously, what the fuck do you expect? THIS IS AMERICA.
I am Chumbawamba.
Clearly not a lot of money spent on risk managment @ FNM....
Fannie Mae Files $15.8 Billion in Claims in Lehman Bankruptcy
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTDOQtaju7rI&pos=7
I can remember somewhere around last November, the media, the congress, Paul Krugman, and the presidential candidates were spouting things along the lines of "Listen, nobody cares about Moral Hazard, we have bigger things to worry about now..." I wonder why I never could agree with any of them about that.
Business is booming over here at Crane Paper:
http://www.crane.com/navContentProduct.aspx?NavName=AboutUs&DeptName=CurrencyPaper
Did you all see Congress extended the $8,000 tax credit yesterday, as well as unemployment benefits?
(http://www.washingtonpost.com/wp-dyn/content/article/2009/11/05/AR2009110505439.html )
How else would the government shoot par on the course if they don't support FNM/FRE/FHA?
I like the science references.
Nothing will change.
Answer: Eliot Spitzer on a booty call?
close, that's "do me good"
How do Bernanke, Geithner, the GS and JPM people sleep? I only see 2 options. a) They are fully convinced the people are such a bunch of idiots than nothing wrong is to happen to them as a result of what they are doing. b) They have some HUMONGOUS
they take no great pains to conceal their actions, and they dont care if we figure it out or not. they beleive that we will do what we are told, and in that they are basically right.
you get... foolocracy . Not sure how else to label the current socioeconomic structure.
Cleptocracy.
I dunno guys, looks like a healthy/growing economy to me: http://www.fdic.gov/bank/individual/failed/banklist.html
Actually, I'm thinking it's time to start buying again..
i bought call options on 9 bank failures tonight, its already in the money with 16 bank and counting, what a homerun...
AIG goes back for the 976th lifeline .......
$4.2B so in AIG terms more of a rounding error.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTiA9ccD.IoE&pos=4
Note that their revenues were down, it appears, like with GM and Chrysler, there are still some patriots out there who refuse to do business with these bailout firms.
AIG "borrows" another $4.2 Billion - what an outrage.
This has gone way beyond bizzare. I fear for my 4 month old daughter and the mess we are creating for her future.
one of your best pieces of writing to date Marla....i'm laughing so hard but i should be crying for my children's future.
I always promise to do good things with other peoples money because I've found out that if you tell them you want to do bad things with it. They won't GIVE IT TO YOU!!