Where is the accountability? These deep dark holes in illiquidity are going to ruin the global financial system. The people that think more debt will solve the problem. It won't. Kicking the can further down the street is not a solution. The infamous "hope" strategy will not help these institutions. The problem will only continue to get worse until there are no choices left and a forced re-balancing of debt-credit-value will ensue.
Freddie Mac Seeks Billions More After Big Loss
By THE ASSOCIATED PRESS
Published: May 5, 2010
WASHINGTON (AP) — Freddie Mac is asking for $10.6 billion in additional federal aid after posting a big loss in the first three months of the year.
The new request will bring the total bill for rescuing Freddie Mac, which has been effectively owned by the government since nearly collapsing in September 2008, to $61.3 billion.
Freddie Mac said Wednesday that it lost $8 billion, or $2.45 a share, in its first quarter. The results compared with a loss of $10.4 billion a year earlier. The most recent quarter includes $1.3 billion in dividends paid to the Treasury Department.
The company, however, cautioned that new accounting standards made it difficult to compare the most recent quarter with the year-earlier period. In the first quarter of this year, Freddie Mac was forced to bring $1.5 trillion in assets and liabilities onto its balance sheet, causing the company’s net worth to fall by $11.7 billion.
Nevertheless, the company’s chief executive, Charles E. Haldeman Jr., said, “We are seeing some signs of stabilization in the housing market, including house prices and sales in some key geographic areas.”
Mr. Haldeman cautioned, though, that the housing market “remains fragile with historically high delinquency and foreclosure levels” and high unemployment.
Created by Congress, Freddie Mac and its sibling company, Fannie Mae, buy mortgages from lenders and package them into bonds that are resold to global investors. As the housing bubble burst, they were unable to raise enough money to stay afloat, and the government effectively nationalized them.
The total taxpayer bill for both is now about $136 billion.
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