Freddie Mac (FRE) moments ago announced that they need $10.6 Billion to address a budget deficit of $10.5 Billion.

The FHFA, as conservator, will formally submit a draw request from the U.S. Treasury (taxpayers) as soon as possible. It is expected that Freddie Mac will receive the new funds by June 30, 2010.

Freddie Mac Needs More Money – From You is a post from: Rebel Traders - Stock Market and Economic Analysis

Will the deteriorating conditions in Europe result in American tax payers digging into their wallets to assist with European nation bailouts?

It was reported today that the U.S. Treasury Department was in “close contact” with officials in Europe. Whenever I hear that U.S. officials are in close contact with someone or some nation I get worried.

Why would we contribute to the bailouts in Europe? First is that American corporations are very intertwined with the Euro, and as such American corporations will push the government to make sure bailouts move swiftly in order to stabilize the Euro currency, even if that means involving American taxpayer funds.

Another reason goes right back to the banks and investment houses (yea, Wall Street again). It has been said by some main stream media outlets that a collapse of Greece or the Euro itself would have little impact on the United States. That statement could not be further from reality. Remember that Wall Street banks fought tooth and nail to have their restrictions reduced over the past decade, and as such these firms are ‘in deep’ with derivatives, currency swaps, and bonds of various flavors tied to Europe.

So will American taxpayers be a part of Europe’s bailouts? I expect we will.

Obama concerned about Greek debt, monitoring closely

ABOARD AIR FORCE ONE, April 28 (Reuters) – U.S. President Barack Obama is concerned about Greece’s debt problems and his administration is in touch with Europe about the issue, White House spokesman Bill Burton said on Wednesday.

"This is something that is of great concern to the president and we’re monitoring it very closely," Burton told reporters on Air Force One, adding that the U.S. Treasury Department and other agencies were "in close contact with folks in Europe about the issue." […]

Americans to Bailout Greece? is a post from: Rebel Traders - Stock Market and Economic Analysis

Fannie Mae (NYSE:FNM), in their latest earnings statement announced that an additional $15.3 Billion is required to cover additional losses.

WASHINGTON, DC – Fannie Mae (FNM/NYSE) reported a net loss of $15.2 billion in the fourth quarter of 2009, compared with a net loss of $18.9 billion in the third quarter of 2009. Including $1.2 billion of dividends on our senior preferred stock held by the US Department of Treasury, the net loss attributable to common stockholders was $16.3 billion, or ($2.87) per diluted share, in the fourth quarter of 2009, compared with a loss of $19.8 billion, or ($3.47) per diluted share, in the third quarter of 2009. Our fourth-quarter results were driven primarily by credit expenses, which declined from the third quarter but remained at an elevated level, and our recognition of a $5.0 billion loss on our low income housing tax credit investments. […]

For the full year of 2009, Fannie Mae reported a net loss of $72.0 billion, compared with a loss of $58.7 billion for 2008. […]

The fourth-quarter loss resulted in a net worth deficit of $15.3 billion as of December 31, 2009, taking into account unrealized gains on available-for-sale securities during the fourth quarter. As a result, on February 25, 2010, the Acting Director of the Federal Housing Finance Agency submitted a request for $15.3 billion from Treasury on the  company’s behalf. FHFA has requested that Treasury provide the funds on or prior to March 31, 2010. […]

Whatever happened to the “no more bailouts” the Obama administration announced five months ago?

Fannie Mae (FNM) Asks for More Taxpayer Funds is a post from: Rebel Traders - Stock Market and Economic Analysis

Elizabeth Warren has penned an op-ed for the Wall Street Journal, and she holds nothing back.

[…]Banks and brokers have sold deceptive mortgages for more than a decade. Financial wizards made billions by packaging and repackaging those loans into securities. And federal regulators played the role of lookout at a bank robbery, holding back anyone who tried to stop the massive looting from middle-class families. When they weren’t selling deceptive mortgages, Wall Street invented new credit card tricks and clever overdraft fees.

In October 2008, when all the risks accumulated and the economy went into a tailspin, Wall Street CEOs squandered what little trust was left when they accepted taxpayer bailouts. As the economy stabilized and it seemed like we would change the rules that got us into this crisis—including the rules that let big banks trick their customers for so many years—it looked like things might come out all right.

Now, a year later, President Obama’s proposals for reform are bottled up in the Senate. The same Wall Street CEOs who brought the economy to its knees have spent more than a year and hundreds of millions of dollars furiously lobbying Washington to kill the president’s proposal for a Consumer Financial Protection Agency (CFPA). […]

[…] The consumer agency is a watchdog that would root out gimmicks and traps and slim down paperwork, giving families a fighting chance to hang on to some of their money. So far, Wall Street CEOs seem determined to stop any kind of watchdog. They seem to think that they can run their businesses forever without our trust. This is a bad calculation.

It’s a bad calculation because shareholders suffer enormously from the long-term cost of the boom-and- bust cycles that accompany a poorly regulated market. J.P. Morgan CEO Jamie Dimon recently explained this brave new world, saying that crises should be expected "every five to seven years."

He is wrong. New laws that came out of the Great Depression ended 150 years of boom-and-bust cycles and gave us 50 years with virtually no financial meltdowns. The stability ended as we dismantled those laws and failed to replace them with new laws that reflected modern business practices. […]

[…]When the history of the Great Recession is written, they can be singled out as the bonus babies who were so short-sighted that they put the economy at risk and contributed to the destruction of their own companies. Or they can acknowledge how Americans’ trust has been lost and take the first steps to earn it back.

Read the full article at the WSJ

Elizabeth Warren – Wall Street Bonus Babies is a post from: Rebel Traders - Stock Market and Economic Analysis

GMAC, the company that was not content with just issuing car loans, is now bleeding money from every orifice. I guess the tax payers will have to bail them out, again.

(Bloomberg) — GMAC Inc., the auto and home lender controlled by the U.S. government, posted a record quarterly net loss, driven by the declining value of mortgage assets.

The fourth-quarter loss from continuing operations was $3.9 billion, compared with profit of $7.7 billion a year earlier, Detroit-based GMAC said in a statement. GMAC’s net loss was $4.95 billion after writing down mortgage holdings. For the year, GMAC swung to a net loss of $10.3 billion from a $1.87 billion profit.[…]  (H/T Butch)

GMAC Reports Record Loss – Mortgages Gone Bad is a post from: Rebel Traders - Stock Market and Economic Analysis

Ahead of tomorrows big show on the Hill, Tim Geithner’s written testimony has been leaked. I do not know if this was intentionally leaked or not. Nor do I know how it came to be on the net ahead of the embargo period, but it is swilling around the net now.

Tim Geithner Written Testimony

Tim Geithner – Written Testimony For AIG Hearing Is Released is a post from: Rebel Traders - Stock Market and Economic Analysis

Are you angry about Wall Street bailouts? Are you a Wall Street banker who enjoys looking down on the peasants from whom you have taken so much? Well now you can download an app for your iPhone and play ‘iBailout’.

Now you can be the Federal Reserve traversing your way through Wall Street eating money and chasing away angry citizens. The game progresses into citizens becoming mobs with pitchforks and torches going after the Fed. I want to see the XBOX 360 version!

Finally, the first really useful app for the iPhone.

iBailout:

iBailout – Pitchforks, Torches, Angry Mobs, and Bailouts – Now This Sounds Like Fun is a post from: Rebel Traders - Stock Market and Economic Analysis

Again I ask whatever happened to President Obama’s statement four months ago that there would be no more bailouts?

Here we go again…

[...]GMAC Financial Services is close to getting approximately $3.5 billion in additional aid from the U.S. government, on top of $12.5 billion already received since December 2008, according to people familiar with the situation.

The announcement, expected within days, will coincide with GMAC taking additional steps to absorb losses related to its mortgage operations, these people said. The cleanup is designed to return the Detroit-based finance company to profitability in the first quarter of 2010, according to one of these people.

A GMAC spokeswoman declined to comment on any potential government action but said, “GMAC has been conducting a strategic review of its business and evaluating options to address the challenges in its mortgage operation.” The spokeswoman said GMAC wants to prepare itself to repay the U.S. government.[...]

GMAC says they want to prepare itself to repay the U.S. Government. Is taking more tax payer funds a necessary step before repaying the Government? I don’t know what kind of math GMAC is using to come up with an idiotic statement like that, but if it is the same math they use to balance the books at their retail bank (Ally Bank) then I would run as fast as I could away from that one.

[...]The mortgage-related write-downs to be announced as early as this week will affect assets held by ResCap and Ally Bank, GMAC’s online bank. Ally Bank was created after the company received approval in late 2008 to convert to a bank holding company and qualify for government money under TARP. The arrangement left the Federal Reserve with regulatory authority over the parent.[...]

From the Ally Bank web site:

Who we are

We are Ally Bank, built on the foundation of GMAC Financial Services. And with that experience we’ve learned that these times demand change and a new way of doing business. So we’re taking banking in a new direction.

That means talking straight, doing right and being obviously better for our customers.

You may be asking…

Is my money safe with Ally?

Yes it is. We’re one of the best capitalized banks in the country. And all Ally accounts are covered by the FDIC up to $250,000 per depositor. (emphasis added)

They are capitalized so well that they need another infusion of tax payer funds. I’m sorry, but I have to say to GMAC and Ally Bank that you are just one more example of what is wrong with the entire system.

To the Government I say: please let GMAC die already, enough is enough.

From the ‘Move Your Money‘  campaign we have the following video – - -

Another Bailout – GMAC To Get More Money is a post from: Rebel Traders - Stock Market and Economic Analysis

Breaking -

What is the best way to announce news that people may not be too thrilled with? You do it on Christmas Eve, when Wall Street is entering ‘sleep mode’ for the Christmas break, and when it is also a time when many Americans are too busy with holiday preparations to be watching the financial press.

This afternoon, Treasury Secretary Tim Geithner (TurboTax Timmy) announced that the Government (tax payers) will essentially backstop any and all losses above the already pledged funds that Fannie Mae and Freddie Mac incur out to December 31, 2012.

SECOND AMENDMENT dated as of December 24,2009, to the AMENDED AND
RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT dated as of
September 26,2008, between the UNITED STATES DEPARTMENT OF THE TREASURY
(“Purchaser”), and FEDERAL HOME LOAN MORTGAGE CORPORATION (“Seller”), acting
through the Federal Housing Finance Agency (the “Agency”) as its duly appointed conservator
(the Agency in such capacity, “Conservator”). [...]

Amendment to Section 1 (Relating to Definition of “Maximum Amount”).

The definition of “Maximum Amount” in Section 1 of the Existing Agreement is hereby
amended to read as follows:

“Maximum Amount” means, as of any date of determination, the greater of
(a) $200,000,000,000 (two hundred billion dollars), or (b) $200,000,000,000 plus
the cumulative total of Deficiency Amounts determined for calendar quarters in
calendar years 2010,2011, and 2012, less any Surplus Amount determined as of
December 31,2012, and in the case of either (a) or (b), less the aggregate amount
of funding under the Commitment prior to such date. [...]

That’s right, a blank check has now been handed to Freddie and Fannie, and the routing number on the bottom of the check reads  :TAX PAYER:

Perhaps this decision was necessary due to the still rising delinquencies that I reported on earlier today. Delinquencies across all income classes are still rising, and this trend is expected to continue. So as more and more homes are foreclosed and banks must then acknowledge the actual value (mark to market) which will result in significant losses from the make believe value they currently sit at on the books (thanks to mark to make believe accounting rule changes last year).

It could also be that the housing market has not yet reached bottom. A scenario that I still see as very real. Some have said the worst has passed with regards to the housing market, I say there is still more pain ahead for this sector, much more.

Everyone should feel like Santa Clause on this Christmas Eve because we just gave Fannie and Freddie a free ride, and we will pay for it all.

Geithner Pulls a Fast One On Christmas Eve – Tells Fannie & Freddie That Government Will Backstop ALL Losses is a post from: Rebel Traders - Stock Market and Economic Analysis

Treasury Secretary Tim (Turbo Tax) Geithner has come under a lot of fire in recent months, and with just cause I might add.

Today Tim Geithner came under heavy fire on Capital Hill for his failed policies, bailouts, and the growing deficit. The pivotal moment for me was when Tim Geithner said the following:

{I do not believe that the removal of Glass-Steagall had any impact on the current crisis}

That my friends is an outright admission that he does not work for the good of America or its citizens, but instead works for the good of Wall Street, even if it means placing the taxpayers at great risk.

It was the elimination of Glass-Steagall in 1999 that allowed banks to cross the line into non banking endeavors such as mortgage backed securities. The Glass-Steagall Act was originally enacted following the Great Depression to prevent banks from putting the financial system at risk. How Mr. Geithner thinks that this had nothing to do with the current financial disaster is simply beyond words.

Recall that before becoming Treasury Secretary he was the President of the Federal Reserve Bank of New York. The very Federal Reserve bank that was instrumental in aiding and abetting the bailouts of the insolvent banks, participated in the meetings and doings of the Bear Stearns collapse, Merrill Lynch, Lehman, and many other “investments” that we as taxpayers were forced to pay. He also allowed non-banks to acquire bank holding company status so they may be able to draw upon the Fed’s (tax payer) funds via the discount window. Something that was until this crisis only available to ‘real’ banks.

Recall that earlier this year Tim Geithner was speaking to a group of university students in China and stated that China’s investments in the United States were safe. This was followed by an outburst of laughter from the audience (some people don’t fall for lies).

Recall that Tim Geithner was instrumental in the behind the scenes arrangement that allowed Goldman Sachs to receive full payment for credit default swaps  that were tied to AIG. Those credit default swaps would normally have paid between 25 and 55 cents on the dollar in this situation. Instead Tim Geithner allowed Goldman Sachs and even some foreign banks to receive par on the default swaps and worst of all it was essentially laundered money. The money went from the tax payer to AIG, from AIG it went directly to Goldman Sachs. Everybody has to save Goldman Sachs… right? This all took place when Geithner was running the show at the New York Federal Reserve and former Goldman Sachs chairman Steve Friedman was on the board of directors of the New York fed when the money laundering operation was devised.

Mr. Tim Geithner – RESIGN NOW

Tim Geithner – He Should Resign is a post from: Rebel Traders - Stock Market and Economic Analysis