The Economic Populist - Speak Your Mind 2 Cents at a Time Fri 2009-09-11 17:54 EDT

90% of Residential Loans U.S. taxpayer backed

Buried in a Washington Post article: 90 percent of all new home loans are funded or guaranteed by taxpayers...taxpayers are on the hook for most of the loans that are still being made if they go bad. And they are also on the line for any losses in the massive portfolios of old loans at Fannie Mae and Freddie Mac, which own or back more than $5 trillion in mortgages.

90; economic populist; Mind 2 Cents; Residential Loans U.S. taxpayer backed; speaking; Time.

Bruce Krasting Fri 2009-09-04 19:21 EDT

Fannie's Trading Derivatives Hard, and Losing

Bruce Krasting

It has been my contention that the Agencies were a factor in the bond market volatility in the past three months. Fannies 10Q has the following information regarding their derivative activity in the first six months of the year. As of June 30 FNM had a balance sheet of $900 billion. Against that position they bought and sold over the counter derivative contracts totaling $1.2 Trillion. On average $100 billion per day. There can be little doubt but that FNM has been adding to the volatility in the credit market. As luck would have it, the end result of all of this was a loss of $2.2billion.

Bruce Krasting; Fannie's Trading Derivatives Hard; Lose.

Bruce Krasting Fri 2009-09-04 18:31 EDT

Fannie Has .9 Trillion in Troubled Loans - 8K

Bruce Krasting

Fannie Mae's 8k has an interesting slide. It is a look at their questionable assets. The slide is not easy to read. It can be found in the 2009 Second Quarter Supplement, on page 5. The report describes FNM's exposure to problematic classes of mortgages on their book. That total comes to a whopping .9 Trillion. The total book of business is $2.7 Trillion, fully 32% of their book is troubled.

8k; 9 trillion; Bruce Krasting; Fannie; troubled loans.

Bruce Krasting Fri 2009-09-04 18:30 EDT

Open Letter to FHFA's New Director Edward DeMarco - A Proposal for the Agency REO/Preferred Shares

Bruce Krasting

Let me welcome you to your new responsibilities. You have a very important job. There are a significant number of people in the financial world who lie awake at night worrying about the mortgage lenders you are responsible for. Fannie Mae, Freddie Mac and the FHLBs hold or guaranty $6.3 Trillion in residential mortgages. It is simply not possible for the US to get out of the mess we are in unless these Agencies are stabilized. Should those Agencies fail, all that has been done to heal the US financial sector will have been wasted. In a significant manner, your success or failure will determine the medium term course of the US economy.

Agency REO/Preferred Shares; Bruce Krasting; FHFA's New Director Edward DeMarco; Open Letter; proposed.

Bruce Krasting Thu 2009-09-03 18:21 EDT

US Treasury on Agency MBS -- Don't Buy It!

Bruce Krasting

The office of Inspector General, Department of Treasury released a report on 8/6/09 on the failure of the National Bank of Commerce. NBC went toast on 1/16/2009. The principal source of its collapse was its investments in Fannie Mae Preferred Stock. They owned $98mm of that swill. When they wrote it off they had no tier-one equity left and had to be shuttered... This report is a kick in the head for everyone involved. Fannie and Freddie look bad. Who would want to own the GSE paper with this warning from Treasury? It makes Treasury look silly. They hold the Government Pref. issued by the Agencies. If they guy down the hall is saying don't buy the debt he is certainly saying don't buy the equity. The Fed looks the worst of the lot in light of this. They are in the process of buying $1.25 Trillion of Agency MBS. I wonder what the Treasury IG would have to say about that level of concentration.

Agency MBS; Bruce Krasting; buy; Treasury.

Fri 2009-07-24 00:00 EDT

Why The Media Ignores The $400 Billion Fannie And Freddie Bailout

400; Fannie; Freddie Bailouts; Media Ignoring.

Tue 2009-06-16 00:00 EDT

Mish's Global Economic Trend Analysis: Fannie Freddie Delinquencies Soar (and they are going to get much worse)

Fannie Freddie Delinquencies Soar; Go; Mish's Global Economic Trend Analysis; worse.

Thu 2009-02-26 00:00 EST

naked capitalism: Black Hole Alert: Fannie, Freddie Cash Needs May Exceed $200 Billion

200; Black Hole Alert; exceeded; Fannie; Freddie Cash Needs; naked capitalism.

Fri 2009-02-20 00:00 EST

FT.com | Willem Buiter's Maverecon | Home loans in the US: the biggest racket since Al Capone?

Buiter urges end the deductibility of mortgage interest in the personal income tax, close down Fannie and Freddie and end the role of the US government in the provision of residential mortgages

biggest racket; Capone; com; FT; home Loans; Willem Buiter's Maverecon.

Sun 2008-11-23 00:00 EST

naked capitalism: "Fannie: Going Concern, but I am Getting Concerned"

``the pervasive story of this entire era: all of the financial firm earnings eaten up by subsequent losses''

concerns; Fannie; going concern; naked capitalism.

Sun 2008-11-23 00:00 EST

Calculated Risk: Fannie: $100 Billion May Not be Enough

100; Calculated Risk; Fannie.

Tue 2008-09-23 00:00 EDT

naked capitalism: Freddie, Fannie and (Sort of) Federal Home Loan Bank Bailout

GSE bailout

Fannie; Federal Home Loan Bank Bailout; Freddie; naked capitalism; sorts.

Tue 2008-09-23 00:00 EDT

naked capitalism: Banks Take Bigger-Than-Estimated Hit on Freddie, Fannie Conservatorship

busted preferred stock

Banks Take Bigger; Estimated Hit; Fannie conservatorship; Freddie; naked capitalism.

Tue 2008-09-02 00:00 EDT

naked capitalism: Foreign Investors Selling Freddie, Fannie Debt

Fannie debt; Foreign Investors Selling Freddie; naked capitalism.

Tue 2008-09-02 00:00 EDT

naked capitalism: Freddie, Fannie Nail-Biting Continues

Fannie Nail-Biting Continues; Freddie; naked capitalism.

Mon 2008-08-11 00:00 EDT

Minyanville -

NEWS & VIEWS-A Tale of Two Markets, Part 1, by Bennet Sedacca; Fannie bailout projections

Minyanville.