Freddie Mac requests another $1.8 billion in bailout money

posted at 10:55 am on August 9, 2010 by Ed Morrissey

So much for the bailout of Freddie Mac.  The mortgage guarantor lost more than seven times as much in the second quarter of 2010 than it did in the same quarter of 2009, this time losing over $6 billion.  They want an additional $1.8 billion in TARP bailout money to keep operating:

Government-controlled mortgage buyer Freddie Mac is asking for $1.8 billion in additional federal aid after posting a larger loss in the second quarter.

Freddie Mac said Monday it lost $6 billion, or $1.85 per share, in the April-to-June period. The company is required to pay a 10 percent annual dividend to the Treasury Department on money it has received from the government. That made up $1.3 billion of the company’s second-quarter losses.

The company lost $840 million, or 26 cents a share, in the same quarter last year.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae from the brink of failure nearly two years ago. The new request means they have needed $148.2 billion to stay afloat, about $63.1 billion of which is being used by Freddie Mac.

The news isn’t all bad.  As reader Desmond L points out, the AP report actually mentions why the two GSEs ended up in government receivership in the first place:

During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.

That would be the CRA, the act that the Clinton administration and Congress strengthened in 1997-8 in order to push lenders into making riskier loans to artificially increase the number of mortgages being sold.  But the CRA is only part of the story.  Congress also allowed Fannie and Freddie to issue mortgage-backed securities to lessen their risk on buying subprime loans, which created a huge demand for subprime paper and encouraged people to buy beyond their means.  The collapse of those bonds created the global financial collapse and forced Fannie and Freddie into receivership.

The story is finally getting told, albeit in buried paragraphs in background stories.

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just spreading the wealth.

rob verdi on August 9, 2010 at 11:00 AM

Let us hope we hear the words of Mr. Brownlow soon, “It only remains for me to tell you that neither of you will ever be employed in a position of trust again.”

WashingtonsWake on August 9, 2010 at 11:00 AM

Buy soup stocks.

faraway on August 9, 2010 at 11:00 AM

“MOOOOOOOOOOOORE?!”

Doughboy on August 9, 2010 at 11:01 AM

Good story in the Washington Post today about Fan and Fred’s waning political influence, though it barely scratches the surface of describing what was the most powerful and ruthless lobbying operation Washington has ever seen.

rockmom on August 9, 2010 at 11:02 AM

just spreading the wealth.

rob verdi on August 9, 2010 at 11:00 AM

Beat me to it.

listens2glenn on August 9, 2010 at 11:06 AM

PERFECT picture Ed

cmsinaz on August 9, 2010 at 11:06 AM

Is that little Timmy Geithner in the picture?

DamnCat on August 9, 2010 at 11:07 AM

“Fair or not fair, give it ‘ere you avaricious old skeleton.”

WashingtonsWake on August 9, 2010 at 11:07 AM

Ah, hell nah.

carbon_footprint on August 9, 2010 at 11:08 AM

I’M SO SICK OF FREDDIE MAC AND FANNIE MAE!

Why can’t we listen to this guy? We need people in positions of power that have private sector experience. Wealth can only be created in the private sector. Government jobs only rob us of our wealth and this ridiculous administration has the least amount of people with private sector experience out of any administrations I can think of.

dnlchisholm on August 9, 2010 at 11:09 AM

Sometimes life is hard, and tough choices have to be made. As hard as it is at times, it just has to be said…….

NO!!!!!!!!

capejasmine on August 9, 2010 at 11:10 AM

Is that little Timmy Geithner in the picture?

DamnCat on August 9, 2010 at 11:07 AM

ROFLMAO!!!

capejasmine on August 9, 2010 at 11:10 AM

Is it really that difficult to call the IRS and tell them to turn their cash printing press one speed higher? Relax, $1.8 billion can be churned out in no time.

Bishop on August 9, 2010 at 11:11 AM

By the way, Ed, Mike Gallagher is reading your “state should not be involved with marriage” post right now.

carbon_footprint on August 9, 2010 at 11:11 AM

Freddie Mac is the perfect example of the Law of the Hole. When you are definitely in overhead, stop digging before you bury yourself alive. Simple but definitely true. The problem is the elitists have no perception of reality that they can base any practical thought process on.

volsense on August 9, 2010 at 11:13 AM

~2 billion? That’s chicken feed, barely a rounding error in a trillion dollar budget. We spent more than that canceling a return to the moon space program.

Skandia Recluse on August 9, 2010 at 11:16 AM

dnlchisholm on August 9, 2010 at 11:09 AM

Are you planning on posting the exact same thing on every thread today, spammo?

Bishop on August 9, 2010 at 11:17 AM

Take it from Barney Franks back pocket (with your teeth).

Fuquay Steve on August 9, 2010 at 11:18 AM

NOT…………..ANOTHER……..FRIGGING………..DIME!!!

FAIL, FREDDIE MAC! FAIL!!!!

pilamaye on August 9, 2010 at 11:18 AM

Is that little Timmy Geithner in the picture?

DamnCat on August 9, 2010 at 11:07 AM

You’ve got to pick a pocket or two…..

UltimateBob on August 9, 2010 at 11:19 AM

You’ve got to pick a pocket or two…..

UltimateBob on August 9, 2010 at 11:19 AM

Hopefully they’re also reviewing the situation.

Doughboy on August 9, 2010 at 11:22 AM

It’s like the doctor prescribing Tylenol for a brain tumor.

Limerick on August 9, 2010 at 11:27 AM

Why wouldn’t they be asking for more??? They really haven’t changed anything other than the names of the lackey’s running the damn place. How much did Gorelick and Raines siphon off?? Couple hundred million???

Look for GM showing up hat in hand real soon.

BigWyo on August 9, 2010 at 11:28 AM

Most of you don’t know, but China has a lot invested in Fannie and Freddie. Too bad so sad.

seven on August 9, 2010 at 11:29 AM

An August Surprise from Obama?

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth.

J_Crater on August 9, 2010 at 11:32 AM

Is that picture a young Steven Crowder?

hawksruleva on August 9, 2010 at 11:33 AM

I’m sure THIS $2 billion will fix the problem, and they’ll never come back begging for money again.

Give a man a fish, he’ll eat for a day. Teach a GSE to beg, they’ll beg forever.

hawksruleva on August 9, 2010 at 11:35 AM

An August Surprise from Obama?

J_Crater on August 9, 2010 at 11:32 AM

And it’s still Summer. Expect more of this type of Recovery.

Electrongod on August 9, 2010 at 11:38 AM

Hey, didn’t those Fannie and Freddie executives get some fat bonuses that the media should be reporting? Where’s the outrage that was directed at private businesses that borrowed money from the government and then paid bonuses to their employees?

mchristian on August 9, 2010 at 11:38 AM

The picture with this looks like the lad from OLIVER. If that’s the case, the head of Freddie Mac should start singing: “You’ve got to pick a pocket or two.”

bflat879 on August 9, 2010 at 11:39 AM

J_Crater on August 9, 2010 at 11:32 AM

Great link. I realize plenty of “disenfranchised” voters might be swayed by this, but wouldn’t they be the ones voting democrat in the first place? Might not outweigh the number of voters who are outraged by government intervention, numbers, incidentally, which are only growing the more money they print to flush down the toilet.

Bee on August 9, 2010 at 11:44 AM

Maybe they should let Barney Frank “roll the dice one more time.”

GarandFan on August 9, 2010 at 11:49 AM

Lete Freddie and Fannie both go under and let the chips fall where they may. We would be better off if they did not exist at all. Other lenders would purchase those mortgages at a discount.

jeffn21 on August 9, 2010 at 11:49 AM

Is that little Timmy Geithner in the picture?

DamnCat on August 9, 2010 at 11:07 AM

Can’t be…..he is not asking Americans to squeal like a pig.

cyclown on August 9, 2010 at 11:50 AM

NO MORE BAILOUTS!

dogsoldier on August 9, 2010 at 11:56 AM

WHEN the First Family save a bit on their vacations, Freddie and Fannie will have plenty enough to tie them over.

Sir Napsalot on August 9, 2010 at 12:20 PM

Here’s an idea… how about we figure out how much money it would take to “wind down” operations at Freddie in order to stop the bleeding?

It probably can’t be that much more expensive than it is to bail them out every time they make a dumb decision and/or the executives commit securities fraud to hit targets for massive bonuses.

teke184 on August 9, 2010 at 12:27 PM

just spreading the wealth misery.

FIFY

rob verdi on August 9, 2010 at 11:00 AM

Lily on August 9, 2010 at 12:51 PM

“Dana, they bought their tickets. They knew what they were getting into. I say let ‘em crash.”

Kafir on August 9, 2010 at 12:52 PM

So if they did go under, what exactly would happen?

And I thought the Financial Reform Package was supposed to “end too big to fail”. That’s what the Prez Sez.

Key West Reader on August 9, 2010 at 12:54 PM

Is that little Timmy Geithner in the picture?

DamnCat on August 9, 2010 at 11:07 AM

Of course. You know that because his cohort is The Artful Dodger.

Kafir on August 9, 2010 at 12:56 PM

The picture with this looks like the lad from OLIVER. If that’s the case, the head of Freddie Mac should start singing: “You’ve got to pick a pocket or two.”

bflat879 on August 9, 2010 at 11:39 AM

It is, and in that scene he’s asking for more. Get it?

Kafir on August 9, 2010 at 12:59 PM

Stimulus 2 a com’n !!!!!!
============================
Remember how Pelosi treated the Republicans the first time!!

The Birth of the first bailout,and Pelosi’s Demonization
of the so-called “Failed * years of Bush”)*!!

*(Pelosi’s words).
======================

Speaker Nancy Pelosi (D-CA) Floor Speech Before Bailout Vote

September 29,2008

http://www.youtube.com/watch?gl=CA&hl=en&v=VMLo7i38D58

canopfor on August 9, 2010 at 1:36 PM

Freddie Mac is the perfect example of the Law of the Hole. When you are definitely in overhead, stop digging before you bury yourself alive. Simple but definitely true. The problem is the elitists have no perception of reality that they can base any practical thought process on.

volsense on August 9, 2010 at 11:13 AM

You are supposed to stop digging when you hit rock bottom, not bring in a jack hammer.

agmartin on August 9, 2010 at 1:38 PM

Photo and caption, BINGO!

maverick muse on August 9, 2010 at 4:46 PM

The picture with this looks like the lad from OLIVER. If that’s the case, the head of Freddie Mac should start singing: “You’ve got to pick a pocket or two.”

bflat879 on August 9, 2010 at 11:39 AM

Freddie as the Artful Dodger? That leaves Congress/Potus as the man whose own dog betrayed him, Bill Sykes who killed Nancy and hung himself while attempting escape from the law.

maverick muse on August 9, 2010 at 4:57 PM

Again the point, anytime we bail out a company, Bammie will often fire the CEO, his salary czar will crush the executives salaries, Bammie may simply demand that bonuses be returned, the executives go in front of Congress for some serious abuse, etc, etc. This is standard treatment for banks, investment brokerages, and car companies.

Why do Fannie and Freddie NEVER see this treatment, even though they are far less likely to ever repay the money they have burned through??? Does the old media even think to ask management for a statement?

slickwillie2001 on August 9, 2010 at 6:22 PM

The worst part, I fear is…

A lot of the bonds that are backing Fred, Fan, are in American 401(k)’s and IRA’s, as gov bonds.

Does anyone know?

Kini on August 10, 2010 at 5:39 AM