UPDATE BELOW adds insult to injury…
Yes, just a few days after Freddie Mac came to the government and said, “Please sir, I want more,” sister Fannie Mae is now taking a page from Freddie’s book and doing the same. The good news is that while Freddie needed $10.6 billion, Fannie’s asking for a paltry $8.4 billion.
Why, in this day and age, that’s chump change. And we’re the chumps shelling out.
If the definition of insanity is doing the same thing over and over again and expecing a different result, it doesn’t take an Einstein to see that we are truly crazy if we do anything except say “no” to doing anything except start looking for the least damaging way to shut them down.
Fannie Mae is even telling us clearly that they are on an unsustainable path:
Credit-Related Expenses. We expect that our credit-related expenses will remain high in 2010, as we believe that the level of our nonperforming loans will remain elevated for a period of time…
Credit Losses. We expect that our single-family and multifamily credit losses will continue to increase
during 2010 as a result of anticipated continued high unemployment and overall economic weakness..
Uncertainty Regarding our Long-Term Financial Sustainability and Future Status. We expect that the actions we take to stabilize the housing market and minimize our credit losses will continue to have, in the short term at least, a material adverse effect on our results of operations and financial condition, including our net worth…
Given our expectations regarding future losses and draws from Treasury, we do not expect to earn profits in excess of our annual dividend obligation to Treasury for the indefinite future. As a result of these factors, there is significant uncertainty as to our longterm financial sustainability. [Emphasis mine]
Clearly, I’m not an economist, but it seems to me that any company which has to come begging to the public for money to sustain its operations again and again (yes, I’m looking at you, too, Amtrak…) is not only not too big to fail, but should be allowed to fail immediately in order to get the burden of supporting its useless carcase off the back of the taxpayers.
So, requiescat in pace, Fannie and Freddie. Don’t let the door hit you on the way out; don’t go away mad, just go away; make like a tree and leave; here’s your hat, what’s your hurry?
In other words, buh-bye. And the sooner the better.
UPDATE: Begging for money from us, but both Fannie and Freddie donated at least $200,000 each to the extreme radical group, La Raza. According to La Raza annual reports, Freddie Mac and Fannie Mae donated at least $200,000 in 2008, 2007, and 2006. In 2005 and 2004, Fannie and Freddie both made donations to La Raza, but no amount was given. In 2003, 2002, and 2000, only Fannie Mae is listed as a donor.
So they’re able to donate millions to racist lobbyist organizations and still cry at our doors for money. As President Obama said recently, “Adios, amigos!”