Big Mac's Heart Attack
The Treasury is pumping in billions of dollars into mortgage giants Fannie Mae and Freddie Mac (now under federal control for an initial $100 billion stake). But the money isn’t going in as fast as it’s going out.
Freddie Mac just posted a $25 billion loss from July to September. These losses, together with the red ink spilled since the start of the housing meltdown, have virtually wiped out its gains from the past ten years.
Fannie Mae posted an even larger $29 billion loss on Monday.
The Washington Post reports that the government is set to give $14 billion to Freddie Mac to shore up its balance sheet. But most analysts predict this will just be a drop in the bucket, as Fannie and Freddie are given larger mandates to help struggling homeowners.