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Freddie Mac loses $6.3B in 3Q

Freddie Mac loses $6.3 billion, avoids request for federal aid for 2nd-straight quarter

• By Alan Zibel, AP Real Estate Writer
• On 7:35 pm EST, Friday November 6, 2009

WASHINGTON (AP) -- Freddie Mac's losses narrowed to $6.3 billion in the third quarter, but the government-controlled mortgage finance company didn't need a federal cash infusion.


The McLean, Va.-based company has received about $51 billion since it was seized by federal regulators in September 2008, but said it didn't need any more money for the second-straight quarter.

"We continued to see some positive housing market developments, including higher volumes of home sales and modest increases in house prices in certain areas of the country," the company's new chief executive, Charles Haldeman, said in a statement Friday.

However, he cautioned, high unemployment and rising foreclosures will continue to "impede a full recovery," and the company may need more money from the Treasury Department to stay afloat. The government reported Friday that the unemployment rate hit 10.2 percent, the highest since early 1983.

Freddie Mac's quarterly loss works out to $1.94 per share and includes $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $25.3 billion, or $19.44 per share, in the year-ago period.

The results were driven by $7.6 billion in credit losses as the company continued to build its reserves for bad mortgages. About 3.3 percent of Freddie Mac's borrowers are at least three payments behind on their mortgages, more than double the rate last year.

The problems at Freddie Mac and its sibling Fannie Mae have proven far worse than most experts had foreseen. On Thursday, Fannie Mae asked the government for another $15 billion, bringing the tab for rescuing both companies to about $111 billion.

http://finance.yahoo.com/news/Freddi...html/print?x=0

[Birchtree]

Gee, all Uncle Sam has to do is increase the amount of the welfare checks and everything would be fine. I'm surprised Obama hasn't thought that one out yet.

[Nordic]

Imagine $5000/oz. gold?

[Show-me]

This is good stuff and from The New York Times.

Unemployment surged from 9.8 percent in September to 10.2 percent last month, its highest level since 1983. At the same time, the economy lost 190,000 more jobs. That means employers have eliminated 7.3 million positions since the recession began in December 2007.

As dreadful as they are, the headline numbers understate the severity of the problem. They also obscure an even grimmer fact: Unless there is more government support, it will take several years of robust economic growth — by no means a sure thing — to recoup the jobs that have been lost.

The unemployment rate includes only jobless people who have looked for work in the past four weeks. The underemployment rate — which also includes jobless workers who have not recently looked for work and part-timers who need full-time work — reached 17.5 percent in October. And the long-term unemployment rate — the share of the unemployed population out of work for more than six months — also continues to set records. It is now 35.6 percent.

The official job-loss data also fail to take note of 2.8 million additional jobs needed to absorb new workers who have joined the labor force during the recession. When those missing jobs are added to the official total, the economy comes up short by 10.1 million jobs.

Taken together, the numbers paint this stark picture: At no time in post-World War II America has it been more difficult to find a job, to plan for the future, or — for tens of millions of Americans — to merely get by.
At a recent meeting at the White House to discuss job creation, President Obama said that “bold, innovative action,” would be needed — from the administration, Congress and the private sector — to undo the devastation in the labor market. Americans are waiting for Mr. Obama to lead the way.

There were good ideas floated at the White House meeting, including bolstered federal support for efforts to retrofit and weatherize homes and public buildings. There was also talk of using government money to establishing a so-called infrastructure bank that would issue bonds to help finance big construction projects.

The country also needs a program that would create jobs for teenagers — ages 16 to 19 — whose unemployment rate is currently a record 27.6 percent. Deep and prolonged unemployment among the young is especially worrisome. It means they do not have a chance, and may never get the chance, to acquire needed skills, permanently hobbling their earnings potential.

http://www.nytimes.com/2009/11/08/opinion/08sun1.html

Better keep your job and be thankful, this is going to take a very, very long time. Plan of keeping the kids around a while longer too. Their job market is even worse than ours.

[Show-me]

Remember a month or two ago it would take a average of 250k jobs created a MONTH to get to 5% unemployment. Add another 40k to get to 4% unemployment.

Lets pass another big fat entitlement bill. LOL

[Show-me]

At a meeting in Scotland, the countries' finance ministers pledged to "continue to provide support for the economy until the recovery is assured" after U.S. jobs figures Friday showed unemployment at a 26-year high of 10.2 percent.

"Asset markets have taken comfort from the continued coordinated pro-growth plans of the G-20, with equity markets remaining supported," said Hans Redeker, an analyst at BNP Paribas.

http://finance.yahoo.com/news/World-...n&asset=&ccode=

I feel like Charlie Brown.


To me it says, we will continue to artificially prop up the equities market until the bubble burst and we have a double dip recession, because it will take at least a decade to come back from where we were in the US.

One of the commentators on Safe Haven said it best. "In this climate equities are for renting, not owning."

[Show-me]

GMAC needs more bail out.
Fannie needs more bail out.
MBIA lost its ass due to heaver losses than expected. lol
German Nov. investor confidence down second month in a row.
N. and S. Korea exchange naval fire.
Lloyd's bank will cut 5000.
Japan faces risk of ratings downgrade over debt.
Japan gov. plan pension cuts for JAL. Got to love that one.

Just a few morning headlines.

Why did the markets rally yesterday? Because the G-20 promise more government intervention and free money. Now that make a company more valuable.

American better be watching what is going on. This damn health care debate is taking everyone's eye off the ball. Our DOLLAR is dying a slow death and our Country too. Without a strong dollar foreign investors will be able to buy us up on the cheap, cheap, cheap. Ask Anheuser Busch.

[Show-me]

[Show-me]

So what is the risk now?

GMAC, GM, Chrysler, AIG, Freddie, Fannie, FHA, FDIC, Pension Benefit Guaranty Corporation (or PBGC). Who else needs a bail out. All this Government intervention from birth, to health, to education, to lending, to saving, to retirement. BRILLIANT!

I'm just going to stop thinking and let the good times roll.

[WorkFE]

Originally Posted by Show-me

I'm just going to stop thinking and let the good times roll.

I've heard rumor that starting in 2011 you give them your entire paycheck every payday and they do everything for you. (Mortgage, groceries, car, insurance etc.)

[KevinD]

Originally Posted by WorkFE

I've heard rumor that starting in 2011 you give them your entire paycheck every payday and they do everything for you. (Mortgage, groceries, car, insurance etc.)