It’s always nice to be reminded of how far we’ve come since the dark days of 2008/09 , when American plebs involuntarily bailed out the oligarchy generally, and Wall Street specifically, to the tune of trillions. Sure, all the gains went to the 0.001%, but the wounds have healed, and we’re in the midst of a stellar economic recovery.
The latest proof of how far we’ve come was laid bare by an article in the Wall Street Journal:
Mortgage-finance companies Fannie Mae and Freddie Mac could be at risk of needing more government bailouts, a watchdog said in a report set to be released Wednesday.
The report from the inspector general for the Federal Housing Finance Agency, which regulates Fannie and Freddie, warns that the companies’ declining profits and capital cushions could leave them vulnerable in the event of an economic downturn.
The U. S. government took over Fannie and Freddie in 2008, eventually injecting $187.5 billion in bailout money into the two.
But Fannie and Freddie last month reported weak earnings for the fourth quarter. Fannie recorded net income of $1.3 billion, compared with $6.5 billion in the same quarter a year earlier. Freddie posted a profit of $227 million, down from $8.6 billion.
The disappointing results were mainly due to the accounting treatment of the companies’ derivatives as well as fewer one-time items to bolster income.
This post was published at Liberty Blitzkrieg on Mar 19, 2015.
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