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johnnyrocku (99.64)

FNM and FRE ARE OUT OF CONTROL

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11

June 18, 2010 – Comments (4)

There’s something happening here, What it is ain’t exactly clear.

Fannie Mae and Freddie Mac debt levels have significantly increased in the past 6 months… BY 4 TRILLION DOLLARS!!!!!  Just the increase amounts to over 30% of the entire US national debt, which is itself outrageously out of control at $13.1T!  But at least the national debt took quite a few years to get to this level.  It is very worrisome how quickly FRE and FNM are piling on the debt.

According to Yahoo Finance, On 12/31/09, FNM and FRE total cash – debt was $1.306T

Which wasn’t small by any measure, but look what has happened since then.

Now, a little over 6 months later, the total debt of these 2 companies is $5.288T

The increase in their debt in 28 weeks is $3.982T

WHAT IS GOING ON HERE??? 

How did their debt get several times the size of the TARP bailout plans?

Who is benefitting from all this debt?  It almost has to be the TOO-BIG-TO-FAIL financial institutions.  They get money at low interest from the government, create mortgages at 5%, and sell them to FNM and FRE at no risk with the blessing of our government.  This is not acceptable! 

And who is ultimately going to pay for all this debt???  I sure hope it isn’t the US tax payers, but I have a sick feeling that it surely will be.

THIS MADNESS CANNOT CONTINUE!  PLEASE CALL YOUR REPRESENTATIVES AND DEMAND A STOP TO THIS NONSENSE!

4 Comments – Post Your Own

#1) On June 18, 2010 at 9:59 AM, russiangambit (29.36) wrote:

Because Fannie and Freddie are the US housing market now they have to borrow to sustain the housing market.

I actually was hoping that taking them off NYSE last week was  a small step in the right direction. Government owned entities have no business trading on a stock exchange.  The fact that they continued trading for over a year since the baiout was an outrage.

 > Who is benefitting from all this debt? 

Banks and new homeowners, obviously. Banks because that keeps the value of houses on their books at reasonable levels thanks to government's support of housing and homeowners because they enjoy extra low interest rates.

> WHAT IS GOING ON HERE??? 

I am glad somone still is capable of feelign the outrage at what is going on. After 2 years I am pretty numb to it all. We all live in a banana repuiblic? So what? At least, it is a clean and courteous banana republic.

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#2) On June 19, 2010 at 2:20 PM, johnnyrocku (99.64) wrote:

Russiangambit, we cannot become numb to this!  We must continue to demand that our representatives close this huge loophole allowing banks and other institutions to profit at the ultimate expense of taxpayers!  If they refuse to act, then we must vote them out of office.  If these two pathetic excuses of companies continue piling up debt at their current rate, their debt will EXCEED the US national debt in about a year from now!  Where does this end?  I don't know, but our 'banana republic' won't be so clean and courteous when a loaf of bread costs $1000.

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#3) On June 23, 2010 at 10:14 AM, imobillc (< 20) wrote:

Great post, +1 REC

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#4) On June 25, 2010 at 8:35 PM, jubling (< 20) wrote:

So now we are seeing how the guys up there in the treasury and the fed are washing down our debt. That's why they don't want to touch fannie and freddie. That's the only way all this debt is being piled up and it's all going to come out in the wash as they say. The future is gonna be the same as now when we fools retire. Your money will be worth less than what you have now even if you save it for tomorrow. And this market is not gonna help you preserve your wealth either. This is just the price we have to pay for living in this great country USA, USA!

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