These Green Shoots are F^%$ing Awesome, or Why FNM is FNsad
Fannie Mae, the mortgage-finance company taken over by the government, asked the U.S. Treasury for a $10.7 billion capital investment as an eighth straight quarterly loss drove its net worth below zero once again.
A second-quarter net loss of $14.8 billion, or $2.67 a share, pushed the company to request money for the third time from a $200 billion government lifeline, Washington-based Fannie Mae said in a filing today with the Securities and Exchange Commission.
Today’s results bring the company’s cumulative losses over the last two years to $101.6 billion and will bring its total draw on the Treasury to $44.9 billion since April.
The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees have deteriorated as a recession that began in December 2007 pushed more homeowners into foreclosure. A record 1.5 million U.S. properties received a default or auction notice or were seized in the first half of this year, 15 percent more than a year earlier, as employers cut jobs and temporary programs to assist homeowners came to an end, RealtyTrac Inc. said July 16.
Fannie Mae said it expects the quality of its assets to worsen further and to continue accumulating losses as it executes President Barack Obama’s efforts to modify or refinance loans for as many as nine million homeowners.
“We do not expect to operate profitably in the foreseeable future,” the company said in its filing. “We expect that we will experience adverse financial effects as we seek to fulfill our mission by concentrating our efforts on keeping people in their homes and preventing foreclosures.”
I'm no expert on any of this of course but I think I can point out that there are some awfully strange things going on in mortgage markets. And it's never a good sign when the government goes sniffing at its own teat.
So while the Bank of England says it will just print some more money, the United States has chosen a slightly sneakier route. Is this Western Union? An advanced money laundering scheme? I'm not quite sure if TPTB even understand that they aren't fooling anyone.
The government-owned company is going to the government to get more money (of course, the definition of "money" is still up for grabs). Meanwhile the FDIC is hanging by a thread and somehow it's all okay because the Fed will likely begin pulling out any day now and the numbers show they've actually chilled out on that crack addict motherfuckingmoneyprinting bullshit.
Pass the green shoots, there's no way I can watch much more of this.
If Fannie Mae cannot operate then it should be immediately dismantled. It should have been dismantled 8 fucking quarters ago. There are plenty of vultures more than happy to digest the pieces that remain and the market will somehow purge the rest. But this is a perversion of the market biosystem, with our government's precious infection raging on.
How much longer can they keep this up? I don't have that answer, though eventually the parasite runs out of flesh to eat.