Housing Crash Already $FNMA #FANNIEGATE

Say, ‘What???’

There’s already talk of another bailout for Fannie Mae and Freddie Mac!

“Future profitability is far from assured,” said Federal Housing Finance Agency Office of the Inspector General in a report, pointing out that the firms could again chalk up losses on their derivatives portfolios, similar to those, they reported in the fourth quarter. -Reuters

A lot of other events yesterday obscured this news, but nothing should make your hair stand up more than the idea of another bailout for Fannie and Freddie. How could this be? These guys have made money ‘hand over fist.’

Fannie Mae has paid the U.S. Treasury Department $136 billion since its bailout and covered more than what they had taken from the government, which told investors forever that the agency was quasi-government and were not fully covered by the Full Faith and Credit Clause; oh well. However, the politicians on both sides of the aisle smell a golden goose and are not willing to share their future wealth with investors whose costs are as high as $80 a share.

This coupled with news from the Housing Starts report plunged to a two year low. Perhaps, Housing Crisis 2.0 isn’t so far-fetched.

However, some experts are saying to forget all that and to focus on the number of permits for January and February, which is at its highest level in six years.

I think another bailout is not in the offing; I really think the federal government has hijacked these agencies, depriving individual investors a chance to be made whole or to make money. The problem is the stakes are high and the cash is vast. Why not milk it to death and lean on taxpayers when the well runs dry…it will not happen anytime soon, but it is inevitable.