Wednesday, January 13, 2010

Bank Crisis Inquiry: Where's Fannie?

Today our noble and self-sacrificing solons are grilling the eevil bonus-begotten bankers. The ones that nearly crashed the credit system in fall 2008 with their greed, according to the MSM narrative. Write Daniel Wagner and Jum Kuhnhenn of AP:

Four of Wall Street's most powerful leaders — Goldman Sachs Group Inc. Chairman-CEO Lloyd Blankfein, JPMorgan Chase & Co. CEO James Dimon, Morgan Stanley Chairman John Mack and Bank of American Corp. CEO-President Brian Moynihan — were to give sworn testimony before the Financial Crisis Inquiry Commission, which was holding its first session Wednesday.

Erm. Why aren't the CEOs of Fannie Mae and Freddie Mac on that list, Senator? Last I heard the big banks on Wall Street had paid back their TARP loans. But not Fannie and Freddie. The US government has put $400 billion into Fannie and Freddie since the crash. You know things are really serious because the Treasury announcement about the $400 billion was made on Christmas Eve. Here's Bloomberg's Betty Liu and Matt Leising:

Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute. “The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.

Hmm. Let's get the details.

The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.

Let's get this straight. The bankers have paid back all the money and they are now making record profits. So the banks are no longer a problem.

Meanwhile Fannie and Freddie are bleeding billions and are still losing money. They are going to cost the taxpayers $400 billion at least, and very likely more.

So what does Congress do? It calls up the CEOs of the profitable banks so that it can hector them about their bonuses. They are the problem, apparently.

Can anyone say: Three Card Monte?

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