AND MCAIN VOWS TO MAKE IT WORSE  9:05 am May 11, 2010

America Still Has Its Housing/Mortgage Disaster!

by Ken Layne

Starter home.Those lousy Greeks/Europeans, how can they spend so much money propping up their failed economy and jobless cretins and mountains of bad debt? Don’t they have capitalist scruples or whatever? Oh yeah, and America’s government-run mortgage hander-outer, Fannie Mae, needs another $8.4 billion to get through next week maybe, things have been sort of tough, what with the $11.5 billion loss just in the first quarter of this year.

The Wall Street Journal reports:

Fannie’s losses reflected continuing weakness in the housing market and would have been worse without accounting changes that reduced its deficit. The quarterly loss was an improvement from the $23.5 billion loss for the year-ago quarter and marked the 11th consecutive quarterly loss for the Washington-based firm.

The company has now racked up losses of nearly $145 billion, or nearly double its profits for the previous 35 years.

Oh but that’s okay, at least the other big government backer of home mortgages is okay, right? Uhh:

Freddie Mac, the bailed-out mortgage-finance giant, reported Wednesday that it continues to lose money and needs an additional $10.6 billion in assistance from U.S. taxpayers.

But mortgage delinquencies through Fannie Mae fell by a tenth of a percent, so that’s good? Besides, real estate always goes up! As terrible as this all sounds, Fannie and Freddie are basically holding up the entire American Mortgage market right now — 96.5% of all new mortgages in this doomed nation are either held or guaranteed by the two government-run giants.

As bad as the situation may be, without government conservatorship, Fannie and Freddie could’ve gone down like Lehman Brothers. It is difficult to imagine the chaos and horror that would follow … and that’s why Dangerous Lunatic John McCain just introduced legislation to just shut the danged things down. [Washington Post/Wall Street Journal/Washington Post]

 
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{ 28 comments }

ManchuCandidate May 11, 2010 at 9:11 am

Fucking Fannie Mae.

BTW, a lot of execubots got really rich working for Fannie Mae. Isn’t it about time to start laying some serious beat down with the RICO bat on those that made the decisions that sent this supposedly US gubbiment funded company right down the debt shit hole?

Bruno May 11, 2010 at 9:17 am

Hey, don’t forget a Fanny is a Front-Butt

ph7 May 11, 2010 at 9:24 am

[re=574379]ManchuCandidate[/re]: I have a neighbor, a complete idiot, who was CFO of Fannie Mae, and now is essentially retired at age 50 in a $2M house from his Fannie Mae money. To pass his time, he spends a few hours a day at a small Christian school teaching the science behind the Earth’s 4,000 years of existence. He was fired from Fannie Mae for his idiocy, but luckily it happened when Fannie Mae was on top, so his options made his rich. He now will tell any reporter who calls that he was fired for trying to blow the whistle on Fannie Mae’s accounting practices, which is a complete lie.

Darkness May 11, 2010 at 9:26 am

They should have just left them as guvmint run facilities in the first place, the douchebags. With management paid a FLAT SALARY with NO bonuses. Then when the banks were getting all fraudie and crazie they would have 1) had negative incentive to jump in and join the stupid and 2) would have had positive incentive to open their traps real wide and complain about it! They had the bloody number in front of them.

You want to know why fannie and feorgie and the banks went under? You need look no farther than managers getting rich on short term returns. This been fixed yet? Well, don’t act all surprised when shit bubbles and crashes again, then.

Incentivize the shit you want people doing. Disincentivize the shit you don’t want people doing. It’s really fucking simple.

crapshooter102 May 11, 2010 at 9:28 am

Well first we have to thrash the Execs Ass on Wall Streets with a barbed wire Bat, then we can turn our attention to Fannie and Freddie. They were running the biggest Whore House in DC. Threesomes to all the Rich and Powerful, a kick in the purse to everyone else. This psychotic couple would make The Munsters look like Ozzie and Harriet. Their Ass-Kicking time is coming soon, I hope.

JMP May 11, 2010 at 9:30 am

Well, of course John McCain wants to shut the government mortgage companies down. In the alternative universe the Republicans live in; you know, the one where the Earth is only 6,000 years old and every scientist and government in the world is in a conspiracy to make up global warming for some reason; Fannie Mae and Freddie Mac actually caused the housing collapse somehow, instead of being victims of it.

No, I haven’t heard any explanation of this view that makes any sense, but this is the world where profit-driven corporations can never do any wrong, so any bad things have to be blamed on the government and/or ordinary people somehow; on Earth-Con, it’s also the government and poor black people’s fault for preventing banks from discriminating in loan approvals.

weejee May 11, 2010 at 9:32 am

[re=574384]ph7[/re]: WRT ur neighbor you seem to have drifted from neutrality, somewhere around say pH 2.

charlesdegoal May 11, 2010 at 9:39 am

Everybody’s blaming the Greeks now, and how they retire at 53 and don’t pay their taxes and spend too much. It makes us forget for a fleeting moment that we’re ALL fucked. The economy is a house of cards. Our balls are being squeezed between Goldman Sachs and BP and when they’re through, some other disaster will hit. Greece is a tiny country, merely leaky little boat on the ocean into which we’re all sinking. Capitalism just doesn’t work.

ph7 May 11, 2010 at 9:52 am

[re=574390]weejee[/re]: All that aside, he’s a nice guy, in a Flanders kind of way.

TGY May 11, 2010 at 9:58 am

Consolidate them into Sally Mac or Freddy Mae or Queen of the Mae or Mac and Cheese or WTF-ever. And John Mac needs to be re-elected, hence the doomed proposal pandering to the impanderables.

Numbat Dundee May 11, 2010 at 10:11 am

!. The Greeks are in trouble, supposedly, for paying the Greek population too much money. The US is in trouble, supposedly, for paying people who own banks squillions for lending money to people in trailer parks then repossessing their trailer parks because said repossession (surprise, surprise) didn’t recoup what they’d lent. Even if this narrative was accurate (which it almost certainly isn’t) I’d rather be a lazy Greek who riots and blames capitalism than a bitter American who blames lizard people or “muslins”.
2.How did a company come to be named “Fanny Mae”in the first place, and is there any connection between Fanny Mae and Maggie May?
3. I will now officially gloat about the fact that I live in Australia – a giant quarry beloved of the Chinese – which hasn’t had a recession, perhaps because it is a giant quarry beloved of the Chinese. Our fluent-in-Mandarin and bureaucratic-robotic Blairite Prime Minister, Rudd, has, to everyone’s astonishment, just announced that he is going to tax the bejesus out of the mining companies (they who own the quarries in question, which in reality are open cut coal mines in Queensland the size of West Virginia and a mountain range in Western Australia which is entirely made of iron). The miners are squealing like stuck pigs. It’s really entertaining.
4. “Fanny fanny Mae they have taken you away.”

nappyduggs May 11, 2010 at 10:20 am

Can’t these two stepchildren-this Fanny and Freddie- borrow some cash from ther sister, Miss Mary. Mac? I hear she has silver buttons all down her back. Sounds loaded, to me.

germansteel May 11, 2010 at 10:22 am

You know things are heading for the big shitter when the comments on Wonkette – even on a serious post by a Wonkette editor – are long on substance and short on snark.

JMP May 11, 2010 at 10:38 am

[re=574427]germansteel[/re]: Man, that McCain’s proving to be a big fucking moron with this lamebrain proposal! With this and the wall, he shows that he loves sweeping insane “solutions” that would just make the situations worse.

There, does that make you happy?

Ken Layne May 11, 2010 at 10:45 am

[re=574384]ph7[/re]: Oh my god.

Mr Blifil May 11, 2010 at 10:48 am

[re=574384]ph7[/re]: That man gets a golf clap and a rousing round of “well played, sir!”

FMA May 11, 2010 at 10:49 am

[re=574450]JMP[/re]: I think it’s supposed to be more like this: McCain’s solution to the financial crisis is to implement a program that allows insolvent borrowers to dump their first wives and marry rich beer heiresses who are so zonked on happy pills that she doesn’t realize that her husband is in the advanced stages of Alzheimer’s. Oh, and Meg’s fun bags.

Darkness May 11, 2010 at 10:53 am

[re=574417]Numbat Dundee[/re]: Yeah, gloat all you want, you may have money but your food sucks. I was just there. It sucks.

proudgrampa May 11, 2010 at 11:08 am

[re=574467]Darkness[/re]: You mean food like Vegemite?

We’re happy little Vegemites, as bright as bright can be,
We all enjoy our Vegemite for breakfast, lunch and tea,
Our mummies say we’re growing stronger every single week,
Because we love our Vegemite,
We all adore our Vegemite,
It puts a rose in every cheek.

JMP May 11, 2010 at 11:25 am

[re=574463]FMA[/re]: What have Meg’s fun bags been up to lately, anyway? There’s been no new reports on her in quite some time.

Lascauxcaveman May 11, 2010 at 11:38 am

[re=574417]Numbat Dundee[/re]: “Fannie Mae” is just a nickname for Federal National Mortgage Association (FNMA). A govt-run mortgage backer basically, designed originally to assure that banks would loan money to folks trying to keep their homes/farms back in the First Great Depression. Lately it has become the personal casino of its senior officers, just like all banks.

And [re=574467]Darkness[/re] is right, Aussie food is among the worst in the world. Moreton Bay Bugs are pretty good, though, so there’s that anyway.

Mr Blifil May 11, 2010 at 11:44 am

[re=574505]JMP[/re]: Her fun bags, sadly, are now covered in sticky goo, beyond hope of any containment or clean-up.

SayItWithWookies May 11, 2010 at 11:59 am

[re=574417]Numbat Dundee[/re]: My understanding of the whole Fannie Mae thing (it’s actually called the Federal National Mortgage Association, but bankers and politicians get a kick out of saying “Fannie”) is that FNMA is an insurer of mortgages. Congress set them up and made them more or less independent, but funded by the government, and they’re supposed to insure mortgage companies against defaults, which encourages mortgage companies to lend to a few riskier customers, thereby increasing home ownership.
About the time the housing boom started gaining steam, Congress repeatedly ordered FNMA to cover types of mortgages that FNMA considered too risky (this was way before the no-proof-of-anything mortgages, even) and so they took on far more risk than they could handle, which is why Congress has to bail them out — they got them into this in the first place.
But of course the GOP, who were running Congress for the worst of the housing market, don’t want to blame themselves for the obvious fiscal irresponsibility. They spent eight years thinking that if something was insured, even by an insurer with no money, that it was fine. Now even Dubya has come out and said he was for “reining in” Fannie — as though they got huge and insolvent by insuring crap they knew was worthless willingly. Removing FNMA entirely would basically cause the housing market to collapse entirely and lots of mortgage companies to go out of business. I’d be in favor of that, except that somehow it never ends up that the homeowners get their houses — someone always ends up with the debt and sends me a bill regardless. Also, it would cause a massive recession.
That’s my overly simplistic explanation — and while it works for my primitive understanding, I’m sure it’s more nuanced than that — unfortunately nobody I’ve seen on TV or heard on the radio even manages to get into it to that degree. Their impression seems to be that Fannie Mae is some ogre behind the scenes forcing banks to lend money to a bunch of people from Grand Theft Auto.
Oh, and for a good detailed explanation (I did think of one) — NPR’s Planet Money is a good place to start, and this is pretty helpful: http://www.thisamericanlife.org/radio-archives/episode/355/The-Giant-Pool-of-Money

Jim89048 May 11, 2010 at 12:02 pm

[re=574467]Darkness[/re]: Needs moar Outback, or scrimps on the barbie?

WriteyWriterton May 11, 2010 at 12:21 pm

Things’re gettin’ so bad we’re going to see Letterman get all weepy about an end to irnoy again, and then we’ll know…what? Nothin’ Absolutely nothin’! Hey, teacher, leave that wall alone!

What Fresh Hell is This? May 11, 2010 at 12:25 pm

I have been selling beer cans (instead of recycling). Can I buy Mykonos?

McDuff May 11, 2010 at 12:35 pm

I’m not kidding — this is a true story:

Was talking to my cousin the small-town lawyer and he told me that while he was handling a foreclosure against Mr. A for a local bank a couple of years ago, a big-city mortgage broker was calling him to speed up Mr. A’s foreclosure so the broker could give Mr. A a new mortgage. No skin off the broker’s back, he just passed the risk on to someone else (us taxpayers in the end) and collected his commission.

Darkness May 11, 2010 at 3:24 pm

[re=574484]proudgrampa[/re]: I LIKE Vegemite, having a misspent vegetarian youth eating nutritional yeast from the food coop. I would not classify it as a cuisine, however.

[re=574516]Lascauxcaveman[/re]: Ah, yeah the bugs is delicious. In Brisbane, due to the Joseph Conrad Style Horror of the restaurant situation we repeatedly ate at the same “French” but acceptable restaurant night after night after night and ate Crocodile and Bugs out of desperation. The place was small and crowded and the service very stressed out. What really irked me about Brisbane was every restaurant, no matter how empty, would insist you “reserve” for an hour later when you walked up, and expected you to go drink in the bar for the duration. I’m all for that, normally, but when your stomach is screaming because it is 12 hours off, not so much.

[re=574537]Jim89048[/re]: Next time, it will be an apartment. No restaurant hell for me. So yeah, barbies and kens galore and me holding the tongs.

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