Monday, 17 November 2008

Fannie and Freddie get real

The highlights of the current new realism:
  • Freddie Mac has asked the US government for $13.8B;
  • It suffered a record $25.3B quarterly loss and said that shareholders’ equity was a negative $13.7B. So after being bailed out, it will be worth $100M, presumably.
  • A significant part of Freddie's writedowns was $14.3B of deferred tax assets.
  • Fannie reported a $29B quarterly loss last week of which $21.4B were deferred tax assets.
  • Fannie said it might need more than the $100bn earmarked for each of the two companies in order to stay in business.
  • But it does at least claim to have a positive net worth.
Can I say neue sachlichkeit now?

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