Geithner, Maybe Next Year We'll Fix It

The next time you hear anyone in this administration tell you how we’ve turned the corner, and that all the deficit spending that has been done has prevented the economy from sinking further, consider where housing markets and foreclosures are going.

  • Fannie Mae will seek $15.3 billion in U.S. aid, bringing the total owed under a government lifeline to $76.2 billion, after its 10th consecutive quarterly loss.
  • “Our financial results for 2009 reflected the continued adverse impact of the weak economy and housing market, which has resulted in record mortgage delinquencies and contributed to our recording significant credit-related expenses and net losses during each quarter of the year.
  • For the full year, Fannie Mae’s loss widened to $74.4 billion from $59.8 billion in 2008.
  • After the next government payout, Fannie Mae’s borrowings will carry an annual dividend cost of $7.6 billion, which the company said it will repay by borrowing more money from the Treasury. “This amount exceeds our reported annual net income for all but one of the last eight years, in most cases by a significant margin,” the company said.

What? Fannie Mae (owned by the government) will repay its bailout money by borrowing from the Treasury. Huh? This is illegal if you tried this scam. That’s why Bernie Madoff is in jail.

  • Losses at Fannie Mae are likely to grow with rising unemployment and costs to implement President Barack Obama’s plans to reduce foreclosures, the company said.

Here’s a Obamanomics for dummies refresher. Replace the word ‘investment’ with ‘bailout.’ Then replace the word ‘bailout’ with ‘takeover.’ This should make you feel better.

  • Fannie Mae and McLean, Virginia-based Freddie Mac survived last year on investments the government made in the companies. The Treasury on Christmas Eve removed a $200 billion aid limit on each company, extending unlimited backing through 2012.
  • A record 3 million U.S. homes will be repossessed by lenders this year as unemployment and depressed home values leave borrowers unable to sell or make their house payments.

Meanwhile, if you are looking for a job to keep from losing your home, it may take awhile. I think that’s the HOPE that candidate Obama was talking about. Right now, Obama is concentrating on taking over the health care decisions of all Americans instead of economic recovery through the private sector.

When President Barack Obama signed his $787 billion “stimulus” bill into law last year, he said the bill was “the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; to provide relief for families worried they won’t be able to pay next month’s bills; and to set our economy on a firmer foundation.”  The actual results of the stimulus tell a different story. I guess he just lied to us all. I think that’s the CHANGE part.

  • The amount of nonperforming loans that Fannie Mae guarantees for other investors rose to $174.6 billion from $163.9 billion in the third quarter.

But this might make you feel better. Or not. Treasury Secretary Timothy F. Geithner told the House Budget Committee on Feb. 24.

“We are going to propose reforms to the Congress next year to try to make sure we bring about fundamental change in the housing market and get ourselves in a position where the government is playing a less risky, but more constructive role in supporting housing markets,” Geithner said. “That’s going to be a difficult set of reforms.”

No doubt it will be to borrow our way into hyperinflation. Let’s put this old dog to sleep. Save some money on that Debt Commission Mr. President. Try this simple method. Look in the checkbook. If you see red, don’t spend. Don’t borrow. And don’t steal.

Updated 2/28/2010

Link: Fannie Taps Treasury for $15.3 Billion More After a 10th Loss –