bail out

Fannie Mae & Freddie Mac Get "Unlimited" Bail out!

What a time to bury a press release,Christmas Eve, the headlines awash on health care bill Senate passage. Well, some of use are wired to God and despite cooking pomegranate glazed ducks and wrapping presents, we're not asleep at the wheel!

To find the juice, one must even look between the lines of the U.S. Treasury Press release:

Treasury is now amending the PSPAs to allow the cap on Treasury's funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. At the conclusion of the three year period, the remaining commitment will then be fully available to be drawn per the terms of the agreements.

Bank Bail Outs Proved to be "inside job"

What a surprise, it's not what you know, but who you know especially if you want billions in free money to cover your screw up.

A new study from University of Michigan Professors Ran Duchin and Denis Sosyura found that the financial institutions who has the strongest political "ties" received the largest bail outs.

Duchin and Sosyura focused on the Capital Purchase Program, the largest TARP initiative in terms of the number of participants and the amount of expended capital. As of late September, nearly 700 financial institutions had received about $205 billion under the program.

The Latest Money Suck from Freddie Mac and Fannie Mae

We on the Economic Populist haven't talked much lately on those U.S. taxpayer funded money pits, Fannie Mae and Freddie Mac.

The government took Fannie and Freddie into conservatorship in September 2008.

At that time, each institution was pumped with $100 billion to $200 billion total. Then in February 2009, each received another $200 billion each to bring the bail out tally to $400 billion total.

Realize Freddie and Fannie are not part of TARP, this is a separate bail out.

The MBS (mortgage backed securities) between the two of them is estimated at $5 trillion dollars.

U.A.E. Central Bank to "Stand Behind" Lenders, Abu Dhabi - No Blank Check

Looks like we have another bail out, middle east style.

Bloomberg is reporting, the U.A.E. central bank is offering loans at 50 basis points in a special facility.

The United Arab Emirates’ central bank said it “stands behind” the country’s local and foreign banks, which face losses from Dubai World’s possible default, and offered them access to more money under a new facility.

Banks will be able to use a special facility tied to their current accounts that can be accessed at a cost of 50 basis points above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said in an e-mailed statement today.

CDSes on Dubai went to 647 basis points since the state owned Dubai World said they wish to delay repayment.

More Welfare for the Housing Sector

It wasn't enough to bailout the financial conglomerates with $12 trillion and then provide a first-time homebuyer tax credit that helps them and homebuilders. No, that wasn't enough. Homebuilders needed something more direct and definite. How about huge corporate tax refunds? That's the ticket.

That's right - huge tax refunds to another industry that benefited tremendously from the cheap money that was flowing like water. Now they are helped on the down side And what about us - fu*k the little guy - foreclosures and unemployment keep increasing.

NYT has the story.

ON Nov. 6, President Obama signed the Worker, Homeownership and Business Assistance Act of 2009 into law, extending unemployment benefits by 20 weeks and renewing the first-time homebuyer tax credit until next April.

Small Bank Bail Out in the works

Looks like someone finally realizes that a whole gob of small banks failing can add up to systemic risk. Duh.

The Huffington Post is reporting a plan to bail out the smaller regional banks and community banks is in the works.

Treasury officials and regulators are weighing a fresh round of bailouts for banks that were deemed too risky to qualify for earlier aid.

Representatives from the Treasury Department, Federal Deposit Insurance Corp. and House Financial Services Committee discussed the plan by phone Thursday, said California Bankers Association Chairman Dan Doyle, who was on the call.

Looks like they are making it restrictive, the money will come from the existing TARP fund and the limit would be $5 billion in assets.

Gear Up that Outrage Over Executive Pay - New Report on Bailed Out Bankers

While people go begging for work, losing their homes, getting laid off, our bailed out bank executives made millions. The Washington-based Institute for Policy Studies has a new report, America’s Bailout Barons.

Their key findings:

The Bounty for Bailout Barons: From 2006 through 2008, the top five executives at the 20 banks that have accepted the most federal bailout dollars since the meltdown averaged $32 million each in personal compensation. One hundred average U.S. workers would have to labor over 1,000 years to make as much as these 100 executives made in three.

As an investment, TARP is down $148 Billion

While the actual inspector general of TARP is having a rough time getting information from the U.S. Treasury, a private think tank, Ethisphere Institute, is tracking on the TARP.

According to the Ethisphere TARP Index, when markets closed on Friday, June 19, 2009, the government’s Troubled Asset Relief Program (TARP) investment was down approximately $148.2 billion

Ethisphere is treating the TARP as an investment and tracking on the losses. Not a bad idea since the American public was sold the idea they would get the money back.

Much Ado on Fannie & Freddie

$100 Billion and Rising, that's the cost of the Fannie Mae, Freddie Mac Bail outs.


When Congress was debating the bailout of Fannie and Freddie last July, the official estimate from the Congressional Budget Office was that a bailout would most likely cost taxpayers $25 billion, with only a 5% chance of the price tag reaching $100 billion between them.

In addition, both Fannie and Freddie are likely to need billions of dollars more after they report second quarter results in the coming weeks. Experts believe the cost will only continue to rise in the next year.

"We're assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year," said Bose George, mortgage analyst at Keefe, Bruyette & Woods, an investment bank specializing in financial services firms.

Small Business might get a Bail out

The Washington Post is reporting the Obama administration might throw some $$$ to small businesses. These are the job engines as well as small business owners, when they go belly up, there is no social safety net at all.

The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.

So, what are any details?