Diary

Raise your hand if you thought the $50B bailout for Freddie Mac was the end of it

They’re saying they need another $10B and change just to cover the past quarter. Who could have seen this shock coming?

Freddie Mac is asking for $10.6 billion in additional federal aid after posting a big loss in the first three months of the year. It’s another sign that the taxpayer bill for stabilizing the housing market will keep mounting.

The McLean, Va.-based mortgage finance company has been effectively owned by the government after nearly collapsing in September 2008. The new request will bring the total tab for rescuing Freddie Mac to $61.3 billion.

Freddie Mac says it lost $8 billion, or $2.45 a share, in the January-March period. That takes into account $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $10.4 billion or $3.18 a share, in the year-ago period.

I’m usually pretty decent with numbers, but maybe some can help me out here. If I read this correctly, they “paid back” $1.3B and lost another $6.7B to end up $8B more in the red. So why do they need to borrow $10.6B rather than $8B, nearly an extra one-third above what would keep them even? Gee, could it be because just like every other welfare plan in the history of Washington the cost is understated by several orders of magnitude? Hmmm…

I don’t know, I think they should just take the GM approach. Instead of borrowing another $10M, borrow another $60B, pay back the first $50B, and then Obama and the Dems can trumpet that Freddie Mac has repaid its bailout dough.