Fortune 500 Magazine just ranked Fannie Mae the fifth largest company in America, just above another federal government whore: General Electric. And wouldn’t you know, as if on queue, Fannie Mae is requesting another $8.7 billion bailout. Let's look at the history of this most august and profitable company in the past couple of years:
The massive loss will prompt a $19-billion infusion from the government to keep the mortgage lender solvent, on top of a $15-billion investment of taxpayer money earlier this year
Notice the size of the loss of that year from the previous:
Fannie's most recent loss compares with a $2.2-billion loss in the first quarter of last year, before the government takeover.
Washington-based Fannie Mae and McLean, Va.-based Freddie Mac have been growing ever more dependent on federal largess. The Federal Reserve has bought $366 billion of their mortgage securities and $70 billion of their debt, and has pledged to buy hundreds of billions of dollars more of both. The Treasury has committed to investing as much as $200 billion in each company to keep them solvent and has bought $124 billion of their mortgage investments.In total, the government has committed about $2 trillion to supporting Fannie and Freddie and buying the securities they issue.
No one ever accused the politicians and bureaucrats in Washington D.C. of competence. We as a people are in for a world of hurt.
Source: http://articles.latimes.com/2009/may/09/business/fi-fannie9
http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html
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