Housing market is just fine, move along.

From the WSJ:

Fannie Mae Loss Balloons; Says Needs Treasury For Survival

Fannie Mae (FNM) posted a sharply wider second-quarter loss on $18.8 billion of credit-related impacts as delinquencies continued to surge and the company admitted it is reliant on the government’s help to stay in business.

The mortgage financier, placed under conservatorship in September to prevent its potential implosion, requested another $10.7 billion of aid as part of the $200 billion package extended to Fannie. It has received $34.2 billion so far.

“Due to current trends in the housing and financial markets, we expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury,” said Fannie in its quarterly report, filed late Thursday with the Securities and Exchange Commission. “As a result, we are dependent on the continued support of Treasury in order to continue operating our business.”

From the AP:

Fannie Mae seeks $10.7B in US aid after 2Q loss

The mounting price tag for the rescue of Fannie and its goverment-sponsored sibling, Freddie Mac, is surpassed only by insurer American International Group Inc., which has received $182.5 billion in financial support from the government so far.

Fannie Mae’s new request for $10.7 billion from the Treasury Department will bring the total for Fannie and Freddie to nearly $96 billion. Freddie is expected to report its quarterly results on Friday.

The government has pledged up to $400 billion in aid for the two companies, which play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. They have been under government control since last September, when their near-collapse helped set off the financial crisis.

From Fannie Mae:

Fannie Mae Reports Second-Quarter 2009 Results

Fannie Mae (FNM/NYSE) reported a loss of $14.8 billion, or ($2.67) per diluted share, in the second quarter of 2009, compared with a loss of $23.2 billion, or ($4.09) per diluted share, in the first quarter of 2009. Second-quarter results were driven primarily by $18.8 billion of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing market, as well as the economic recession and rising unemployment.

Total nonperforming loans in our guaranty book of business were $171.0 billion on June 30, 2009, compared with $144.9 billion on March 31, 2009, and $119.2 billion on December 31, 2008. The carrying value of our foreclosed properties was $6.2 billion, compared with $6.4 billion on March 31, 2009, and $6.6 billion on December 31, 2008.

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93 Responses to Housing market is just fine, move along.

  1. tinkerbell says:

    first !……

  2. grim says:

    From Forbes/Reuters:

    Fannie, Freddie regulator to leave post-official

    James Lockhart, the regulator for Fannie Mae and Freddie Mac, will soon step down after more than three years as overseer for the mortgage finance companies, an administration official said.

    Lockhart will step down very soon as head of the Federal Housing Finance Agency, the official said, but no decision has been made about who might be a suitable long-term replacement, nor what role that person would have in shaping housing policy.

    When asked by Reuters in an interview if he is leaving soon, Lockhart would not comment on any move but said he was proud of his work as a regulator and was looking forward to returning to private life.

    ‘It’s just time to get back to the family,’ he said.

  3. tinkerbell says:

    Now here is a hoot !…The Fed bought nearly half of LAST WEEK’S 7 year Treasury Issuance TODAY.The United States HAS OFFICIALLY HIT THE TREASURY DEBT WALL and The Fed and Treasury are engaged in subterfuge and conspiracy in an attempt to hide this from the market….Load up on TBT …http://market-ticker.denninger.net/

  4. grim says:

    From Nasdaq/Dow Jones:

    CBO: Federal Budget Deficit Reaches $1.3 Trillion In FY2009

    The federal budget deficit continued to spiral higher, reaching $1.3 trillion through the first 10 months of fiscal 2009, the nonpartisan Congressional Budget Office said Thursday.

    In its monthly assessment of the state of the federal government’s fiscal picture, the CBO said the deficit is now running $880 billion higher than the comparable period in fiscal 2008.

    The agency said the deficit figure includes $169 billion related to the Treasury financial rescue program, the Troubled Asset Relief Program, and another $83 billion in payments to prop up Fannie Mae (FNM) and Freddie Mac ( FRE).

  5. Sean says:

    Grim – add another 10 billion to that deficit Fannie Mae is seeking an additional $10.7 billion in government aid after posting another massive quarterly loss as the taxpayer bill from the housing market bust keeps growing.

  6. yo'me says:

    Breaking News Senate approves $2 billion “cash for clunkers” extension

  7. Sean says:

    Seems the hardcore Predatory Lenders are making a mint these days in the UK.


  8. Cindy says:


    #6 Yo’me – Wall Street’s Cash for Clunkers from TBP

    From the comments section: Oddly enough, it’s like giving foreign aid to countries that hate us. Seems to work as well too.

  9. grim says:

    #9 – Do I have a choice as to which electricity to top off with?

    Coal or Nuclear?

    Because if I’ve got to fill up with Solar, that’ll hurt.

    Only a matter of time before some NY cartoonist sketches up a plug-in hybrid at a “gas” station. Signboard reads:

    Coal: 10c / kw
    Nat Gas: 11c / kw
    Nuclear: 12c / kw
    Solar: 25c / kw
    Wind: 30c / kw

    Wouldn’t that be a kicker.. American driving around in a plug in hybrid, charging it up by burning cheap dirty coal. Pennsy has some pretty dirty plants, I’m sure we can get some of that them there cheap power over here. Should’a just stuck to foreign oil.

    I’m talking jibberish, everyone knows electricity comes from the power fairies hidden in the wall.

  10. yo'me says:

    Grim,you are right.With all the other alternatives looks like they are pushing for electric.What ever happened to that guy from NJ that was promoting water converting to energy.I can drink enough beer to convert

  11. grim says:

    From HousingWire:

    Deutsche Sees 48% of All US Mortgages Underwater in 2011

    Deutsche Bank believes continued declines in home values will increase the number of US mortgagors with negative equity from 14m in Q109 to 25m in Q111.

    According to a report Deutsche released this week, the 25m represents a projected 48% of all US mortgages. While subprime and option adjustable-rate mortgages (ARM) are the biggest source of underwater borrowers in the current market, Deutsche said a larger percentage of prime conforming and prime jumbo borrowers will join the fray.

    Prime conforming and prime jumbo will make up 79% of all US mortgages and Deutsche estimates 41% of conforming and 47% of jumbo will be underwater, up from current levels of 16% and 29%, respectively.

    This rapid influx of underwater borrowers will have a significant impact on default rates. In addition to future underwater borrowers being forced into default from a “life event” — unemployment, divorce, disability, etc. — Deutsche warned others may “ruthlessly” or strategically default.

    Increased defaults in the middle class will suppress consumption, added Deutsche, further slowing housing recovery.

  12. yo'me says:

    They were talking about building 45 nuclear power plants in the US

  13. grim says:

    “ruthless default”


  14. Pol Clot says:

    SPG floating 500mm in new notes. That should be good for another week of run in the IYR.

  15. yo'me says:

    The bad debts the firms own would be placed in new government-backed financial institutions — so-called bad banks — that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.


    Will this scare “ruthlessly” or strategically default?

  16. Pol Clot says:

    grim = ruthless blogging

  17. grim says:

    What would be left would be two healthy financial companies with a clean slate.

    And what about us? What will we be left with?

  18. Pol Clot says:

    First ideas on what Phony/Fraudy’s “bad banks” will look like:


  19. yo'me says:


  20. Pol Clot says:

    I didn’t know capitalism came with a “reset” button.

  21. Pol Clot says:

    A giant, smoldering Edsel shoved up our collective arses.

    Leona Helmsley was right. Only the little people pay.

    “And what about us? What will we be left with?”

  22. Pol Clot says:

    Anybody got an idea of what I can net when I sell my kids into slavery?

  23. yo'me says:

    And what about us? What will we be left with?

    that would take responsibility for collecting as much of the outstanding balance as possible.

    “The Dapper Don”?

  24. BC Bob says:

    ‘It’s just time to get back to the family,’ he said.


    Translation; Houston, we have a problem.

  25. grim says:

    #24 – You might not need to get rid of them. There is a guy down in Deal that’ll give you a good price on young kidneys.

  26. BC Bob says:

    That was #2.

  27. grim says:

    #26 – Ain’t seen nothin’ yet?

  28. yo'me says:

    Foreclosures are the ones with the baloons all the dots are for sale

  29. BC Bob says:


    Suppose there was an auction and nobody showed up? Welcome to the next bubble; treas sec.

    Little wonder why China has walked away from agency debt and has/is moving out of 10 years into t-bills. Hell, they don’t even have to sell, just don’t renew.

    Then again, no need to worry. Our govt will concoct the next bubble. The fed is steering the ship. Just sit back and hope they can navigate the high seas.

    You can’t fight the fed? What a bunch of BS.

    Is it TIC data or TIC-TIC-TIC data?

  30. safeashouses says:

    Does needing more money from the gov = more write downs?

    Cause i thought the housing market had stabilized and there would be no more write downs. / off sarcasm

  31. BC Bob says:

    Clot [16],

    Thanks for the reminder. It was a great ride down, the first time. Getting ready for phase 2. Gotta luv the carnival barkers, keep it up.

  32. safeashouses says:

    How can the fed buy new issue tres debt? Isn’t that like getting yourself pregnant all by yourself or eating your own p00p?

  33. Sean says:

    re: #36 – same way the Fed is pumping up the Stock Markets.

  34. BC Bob says:

    “Hoboken market continues to be on fire, 10 UC this week.”


    Forget about the mall reporter, it’s Raymond Babbitt.

  35. Cindy says:

    I don’t think a person can say this often enough: What a friggin mess.

  36. yo'me says:

    Cindy you always say it best

  37. Dissident HEHEHE says:


    There’s plenty of buyers making open market purchases of treasuries, see:


  38. BC Bob says:


    Just scratching the surface.

  39. Pol Clot says:

    safe (36)-

    What’s wrong with that? My dachshund eats her own p00p…

  40. BC Bob says:


    In addition to this, who’s Goldman’s #1 trading partner?

  41. safeashouses says:

    You have a dachshund? another fantasy shattered

  42. Pol Clot says:

    Wonder how many of SPG’s mall tenants are in the following spot:

    1. Haven’t paid rent since October.

    2. Have demanded a reworked lease.

    3. Both.

    4. #3, plus the reworked lease has been granted.

    5. #3, plus tenant is in arrears on reworked lease.

  43. Cindy says:


    An Oregon firm in Corvallis – NuScale – is working on small, scalable technology. My brother lives there and knows some folks employed at the firm. It is for real – “baby nukes.”

  44. Pol Clot says:

    safe (45)-

    I will not even ask what the fantasy is, since the fact that I own a dachshund is ruining it for you seems ominous.

  45. Cindy says:

    I can count 7 strip malls within a mile of where I sit that should be torn down with a park put where they stood.

    Instead of cash C4C – We should be trashing strip malls.

  46. BC Bob says:

    Clot [46].

    My fingertips are warming up.

  47. Pol Clot says:

    BC (35)-

    I have a fantasy that the pikers and yahoos can pump SPG up to around $80.

    If the bottom falls out at that level, it will go up in flames faster than the Hindenburg.

  48. safeashouses says:

    #48 clot

    I thought you would have a rotweiler or a pit bull.

  49. BC Bob says:

    FU, Youkilis.

  50. grim says:

    I own two vicious boxers, game on.


    Don’t let the cute face fool you. See that bone? That’s you.

    Yes, he really is that cute.


  51. BC Bob says:

    Clot [51],

    Manna from heaven.

  52. BC Bob says:

    Cindy [49],

    Malls are dead, buried. The old economy. The only dolts that don’t get it is our govt.

  53. Shore Guy says:

    The government has pledged up to $400 billion in aid for the two companies, which play a vital role in the mortgage market by purchasing loans from banks and selling them to investors.”

    I understand the downside of letting Freddie and Fannie go BK. That said, it seems foolish to bail out investors who took a chance on comapnies that did not have prudent lending practices and solid management. Is not the essence of investing risk?

  54. Pol Clot says:

    safe (52)-

    Used to have a bull terrier. She hated everyone and everything, except me. Close enough?

  55. grim says:

    Where is the money coming from? $550 million is more than half of the original CARS allocation.

    From the WSJ:

    Congress Gets an Upgrade

    Congress plans to spend $550 million to buy eight new jets, a substantial upgrade to the fleet used by federal officials at a time when lawmakers have criticized the use of corporate jets by companies receiving taxpayer funds.

    The congressional shopping list goes beyond what the Air Force had initially requested as part of its annual appropriations. The Pentagon sought to buy one Gulfstream V and one business-class equivalent of a Boeing 737 to replace aging planes. The Defense Department also asked to buy two additional 737s that were being leased.

    Lawmakers in the House last week added funds to buy a total of three Gulfstream planes and two additional 737s on top of the Pentagon’s request.

  56. Shore Guy says:


    Too many of them are “me too” places with little in the way of quality. I had to pop into Monmouth Mall today and it was a ghost town. Whomever it was that compared it to the old Seaview Square hit the mark. I guess the upside is that people were not likely spending money they did not have.

  57. safeashouses says:

    #58 pol clot

    Yes. I was getting worried for a second

  58. Shore Guy says:


    We had a nice mini GTG on the beaches of central Monmouth County today.

  59. ruggles says:

    54 – you own? thats what you think.

  60. Shore Guy says:


    Part of purchasing the upgraded planes has to do with the need to fly CODELs and other distinguished visitors to rather hostile places requiring certain countermeasures equipment and secure communications. It just does not make sense retrofitting older aircraft.

  61. #60 Whomever it was that compared it to the old Seaview Square hit the mark.

    It’s erily similar isn’t it?
    What was in the empty anchor store? I can’t remeber.

  62. safeashouses says:

    I found monmouth mall to be kind of creepy the last time I was there a year or so ago.

  63. Shore Guy says:

    At Monmouth or at Seaview? Seaview was Sterns, wasn’t it?

  64. Shore Guy says:

    About the planes, I suspect any number of members of congresss have grown tired of having to fly on CS-17s and C-130s because of the lack of countermeasures on other aircraft.

  65. Pol Clot says:

    Shore (57)-

    Phony/Fraudy are no longer necessary. We’re about to enter an era in which lenders should be able to easily portfolio their mortgages and hold them to payoff or maturity.

    No demand = no secondary market needed

  66. jmacdaddio says:

    A few years ago I blundered on to deadmalls.com which contains info on, you guessed it, dead shopping malls. Stronger malls will survive and weaker ones will perish. I traveled on Route 18 in East Brunswick recently – several of those plazas look like they’re on the ropes.

  67. BC Bob says:

    “We had a nice mini GTG on the beaches of central Monmouth County today.”


    A Boss sighting?

  68. #67 – The one at Monmouth. I can’t remember what store was by the parking garage.
    I thought it might have been Sterns, but I could be thinking of Seaview.

  69. per wikipedia it appears it was Boscov’s which replaced Sterns which replaced Abraham & Strauss.

  70. Cindy says:

    56 BC – “Malls are dead, buried….”

    Jobs – BC – Jobs. We have no driver for jobs.

    Mish had tons of dismal unemployment charts and figures today. 80’s and 90’s internet boom created massive numbers of jobs – 2000-2007 came the housing boom.

    But more and more machines are employed – or innovation does away with the need for prior jobs. I’m thinking about internet purchases – smart meters – (they don’t even need a meter reader anymore) – newspapers…

    I mean man, the obsolescence is accelerating just at a time when our last push of employment (housing and related industries) is totally washed up – bad timing…

    We need a new employment driver – yesterday.

    Why don’t one of you smart folk here invent a labor-intensive product that can only be manufactured in the US and is desired across the four corners of the universe.

    Bueller, Bueller, anyone?

  71. safeashouses says:


    that used to be an A & S. I think it was a hanes before that. After A & S I’m not sure what it turned into.

  72. Pol Clot says:

    Cindy (74)-

    Crystal meth?

    “Why don’t one of you smart folk here invent a labor-intensive product that can only be manufactured in the US and is desired across the four corners of the universe.”

  73. yikes says:

    Clotpoll says:
    August 6, 2009 at 12:11 pm

    Grim, you gonna let shit-for-brains keep this up?

    your fingers to grim’s ears …

  74. yikes says:

    BC Bob says:
    August 6, 2009 at 12:36 pm

    Is Frank still in the A&F line?

    “NEW YORK — Shoppers, worried about job security and finding fewer options among the sales bins, remained tight-fisted in July, resulting in sluggish sales for many merchants and raising concern about the back-to-school shopping season’s health”

    “Among teen retailers, Abercrombie & Fitch posted a 28 percent same-store sales decline, worse than the 26.9 percent drop that analysts expected”


    i love this site
    frank the racist fraud
    always the butt of a good joke

  75. #75 – Thanks safe!

  76. Cindy says:

    76 – Clot – You ALWAYS come through. Why didn’t I think of that. You are soooo right….and we are well on our way to cornering the market I hear.

    Or…CA may become the POT capital of the world. We are so good at growing things…

    Remember Grim, when you write your book about this blog, Clot gets his own chapter. 76 explains it all.

  77. BC Bob says:

    “Why don’t one of you smart folk here invent a labor-intensive product that can only be manufactured in the US and is desired across the four corners of the universe.”


    Well, it’s not labor intensive but currency debasement/debt offerings coincide with your other parameters.

    Our only savior is bricks and mortar. The only problem; Pavlov’s dog does not salivate in regards to this.

  78. bi says:

    nobody catched this?

    Fannie Mae seeks $10.7B in US aid after 2Q loss


  79. Cindy says:

    BC #81

    Brick and mortar – dead around here. No, wait a minute. There has been a lot of talk about POT shops. You know, they could slap one of those suckers in all the malls around here and draw in head shops etc. What a boon to the CA economy.

  80. Cindy says:

    82 – Bi – You can’t say “nobody catched this! Come on.

    Doesn’t your computer flash a red line under the word “catched” as in “don’t type that!”

  81. #84 – I think his PC is too busy doing black box calculations for spell check to function properly.

  82. Cindy says:


    It is late and I get to fly to Oregon tomorrow AM in one of these…I have never been on a private jet.

    I have already started back into my classroom, but next week it will be in earnest. Ah, catched/caught – seriously – that will be my world very soon now.

  83. sas says:

    i love this latest Omama pic:)


  84. Firestormik says:

    sas, you are a joke

  85. DL says:

    Ref 64: Shore; I fly with CODELs. They don’t fly G5s in a combat zone. No counter measures. They ride C-17s, C130s, Chinooks, and Blackhawks.

  86. DL says:

    A motto for our time.

    “Buyers could be convinced to throw in a stronger bid or be motivated to pull the trigger on reflation and recovery hopes; the old ‘buy now or be priced out forever’ is likely to be replaced with the broker tagline ‘buy now or miss the bottom’.”

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  88. xkasrg says:


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