Current Events, Humor

Freddie posts $25 Billion loss

  

From CNN:

Freddie Mac reported a $25 billion quarterly loss Friday that forced the mortgage finance giant to tap $100 billion in bailout money set aside by the government.

The loss triggered a $13.8 billion Treasury Department investment in Freddie (FRE, Fortune 500). The firm is likely to get the money by the end of the month; Treasury will receive preferred shares in return. A Treasury spokeswoman did not have any immediate comment.

Treasury and regulator Federal Home Finance Authority announced on Sept. 7 that they had taken control of Freddie and Fannie Mae, the other giant mortgage finance company, when it became clear that mounting losses on bad mortgages would cause them to run out money.

At the time, the Treasury committed $100 billion apiece to back up the two firms. Friday’s announcement is the first major investment of taxpayer cash into the firms during the current crisis.

Freddie’s third-quarter loss came to $19.44 a share, far larger than the $1.2 billion, or $2.07 a share it lost in the year-earlier period. Much of that loss came from a $14 billion non-cash charge to write down the value of tax credits it had built up. Doubts about the ability of the company to make money in the future and utilize those tax credits caused that charge.

It also took a $9 billion charge to write down the value of securities it held on its books.

But even without those charges, the company’s performance was significantly worse than in previous quarters. Freddie’s losses from credit-related expenses, essentially those on the loans that it backs or owns, soared to $6 billion, compared to $2.8 billion in the second quarter and $1.4 billion in the year-earlier period. Losses from non-interest expense also soared to $1.4 billion

In one quarter, Fannie and Freddie have lost a combined fifty-four billion dollars. That’s a staggering amount of money.

For example, $54,000,000,000 could buy you:

 

  • 27,000 Bentley Continental GT automobiles;
  • 72,000,000 Ounces of Gold, at $750 per ounce. That’s 4,500,000 pounds. Or 2,250 tons of gold;
  • 606,741,573,033 Crunchy Tacos at Taco Bell;
  • 41 New York Yankees (the franchise, not the players); but:
  • 2,076 Years of A-Rod at third base, at his current salary;
  • and only 131 New York Rangers; and
  • 31 Space Shuttles

I think you get the idea.

 

We’d love to be your closing attorneys in Atlanta Georgia. Want to know more? Contact us and we’ll be happy to discuss how Harlan and Associates can be of service to you!

, originally uploaded by b0.

speak up

Add your comment below, or trackback from your own site.

Subscribe to these comments.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*Required Fields