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Fannie Mae Posts 29 Billion Loss

By Jeralyn, Section Off Topic
Posted on Mon Nov 10, 2008 at 09:44:16 AM EST
Tags: bailout (all tags)
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The economy continues to deteriorate:

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    Fannie Mae Posts 29 Billion Loss | 36 comments (36 topical)

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    Just for some perspective... (5.00 / 1) (#3)
    by andreww on Mon Nov 10, 2008 at 11:17:15 AM EST
    $150 billion is the same amount that Obama's energy plan calls for over investing in alternative energy over 10 years.  $150 billion and we won't have a single thing to show for it.

    Just think how many windmills and solar farms we could build with this bailout money.  Just think how many jobs could be created.  

    We're all being robbed - and the Dems are letting it happen.

    No bailout for automakers.... (3.00 / 2) (#4)
    by kdog on Mon Nov 10, 2008 at 11:18:16 AM EST
    What a disasterous message that would send...make sh*tty inefficient cars nobody wants and be rewarded with redistributed wealth.

    I feel for the workers who will surely be laid off, on top of the ones already laid off...but in the long run they'd be better off going to work for foreign carmakers who manufacture cars here in the US that people actually want to buy.  I know we don't manufacture much anymore and don't have the demand for skilled factory workers that we used too...but that ship sailed a long time ago...free trade and greed and globalization won, the American blue-collar worker and manufacturer lost.  It is what it is...better to adapt now than prop up a dead horse.

    To be fair, (5.00 / 1) (#5)
    by sarcastic unnamed one on Mon Nov 10, 2008 at 01:56:14 PM EST
    I think there's more to it.

    I think there are are some good arguments that us automakers are saddled with, I don't know, $1000? $2000? more in pension/health care benefits per car paid to retired workers than, say, the Japanese producers. iow, the price of US autos is $1-$2K higher than the equivalent Japanese auto.

    And secondly a significant portion of the US auto industry's recent financial problems are due to the global economic downturn as a whole. iow, no one's buying many cars these days at any price no matter how "good" they are.

    But then again I live in LA. I'm about the only one I know who owns an American car. I must be a hillbilly or something.

    Parent

    No doubt.... (none / 0) (#6)
    by kdog on Mon Nov 10, 2008 at 02:19:44 PM EST
    there's more to it, higher costs and other factors.  But I think problem # 1 is the American car gained a reputation as a p.o.s. in the 80's, and they've never been successful at changing that perception...whether it's all that accurate anymore or not.  If it wasn't for government contracts and sales for rentals they'd have been up sh*ts creek long before now.  Much like LA I'd imagine, the only American cars I see on the NY highways are squad cars.

    Also they really got caught with their pants down during the recent oil crisis...where was the long term planning for fuel efficient vehicles?  They kept stressing the suv and pick-up truck as if oil would be cheap forever...not too swift.  Such corporate leadership warrants a bail-out?  

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    Probably not. (none / 0) (#7)
    by sarcastic unnamed one on Mon Nov 10, 2008 at 02:24:21 PM EST


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    I'm afraid this is the unfortunate reality (1.00 / 1) (#8)
    by Slado on Mon Nov 10, 2008 at 02:59:14 PM EST
    of a democratic majority and an Obama presidency.

    Labor expects payback for the free campaign workers and big donations.

    They don't want to here about how they are the major reason the US automakers are unprofitable.   Dems and Obama will repay them with major bailouts for their employers and maybe even better rules for labor to all but garuntee the big three become less competitive rather then more.   The bailout will only delay the inevitable which is fine by the dems becuase they would rather have the support to get elected.

    Parent

    Typical kiss-up (5.00 / 1) (#11)
    by jondee on Mon Nov 10, 2008 at 03:40:18 PM EST
    kick-down wingnut reasoning: it's all the fault of those greedy line workers. Of course, U.S automakers havn't yet become so "unprofitable" that the top execs have been forced to give up their six and seven figure compensation packages. But, those guys earned every penny -- making those companies so innovative and successful.

    Parent
    That was for Slado (none / 0) (#12)
    by jondee on Mon Nov 10, 2008 at 03:40:47 PM EST


    Parent
    Look lets look at some facts (1.00 / 1) (#15)
    by Slado on Mon Nov 10, 2008 at 08:27:29 PM EST
    The big three are getting their butts whipped by who?

    Honda
    Haundai
    Toyota

    They don't work with the UAW.  Wonder why?  If it made good buisness sense then they would do it.   Simple ECON 101 teaches us there is no reason to make your product cost more if it doesn't increase it's value.

    All that being said it is only one of the reasons the big three are suffering but to pretend that it isn't at least one of the main ones is insane partisanship.

    The only reasons dems are even interested in saving the Big Three is because of thier relationship to the very unions that are making them insolvent.  Quite ironic really.  If Honda was going down would the dems care?  Nope.  

    This is exactly the kind of partisan payback that will be used against the democrats in the 2010 midterms.

    Remember when you gave dems total control? What did they do with it?  The rewarded their buddies in the UAW with million dollar kickbacks and favors and now they're back for more?  Do you really want that again?  Que dollars burning into smoke with face of your local democratic congressman in background.  Fadeout.

    Parent

    I forgot one... (none / 0) (#16)
    by Slado on Mon Nov 10, 2008 at 08:31:18 PM EST
    Nissan (proud owner of a Nissan Murano, built in Japan)

    Wife drives a Toyota Siena (built in KY) second choice was a Honda mini-van.

    Didn't even consider the american ones.

    Parent

    Can't blame it all on labor Slado... (none / 0) (#9)
    by kdog on Mon Nov 10, 2008 at 03:19:02 PM EST
    the guy working on the line doesn't decide what cars to build or the mpg standards of their models.

    Besides, labor and management make the contracts together...if the automakers couldn't afford the benefits they negotiated with the unions they shouldn't have agreed to them.  

    Bottom line...if the automakers wanna stay in business, and the workers wanna save their jobs...I think it is time to renogotiate.  But prior to that I'd make sure every knucklehead in management who was in on the decision to focus so heavily on suv's and trucks gets canned.  They need to come up with a comprehensive plan to be competitive again and ensure their own survival, instead of running to the taxpayer for a handout.

    Parent

    I think there's only (none / 0) (#10)
    by sarcastic unnamed one on Mon Nov 10, 2008 at 03:28:17 PM EST
    one knucklehead in management who's realistically responsible for the major product lines at a US auto maker.

    Parent
    The CEO?.... (none / 0) (#13)
    by kdog on Mon Nov 10, 2008 at 03:51:31 PM EST
    I assume you mean the CEO...but I think the yes-men who said "yeah boss, ramping up production on those Eddie Bauer series Explorers is a great idea!" failed at their jobs too.

    Parent
    I probably wouldn't go that far, (none / 0) (#14)
    by sarcastic unnamed one on Mon Nov 10, 2008 at 03:59:20 PM EST
    but I see your point.

    Parent
    And (none / 0) (#19)
    by cal1942 on Tue Nov 11, 2008 at 12:07:07 AM EST
    were they to do?  Say you're wrong boss and I'm walking out of the aircraft without a parachute of any kind.

    Courage is easy if your livlihood and responsibility for your family isn't at stake.

    Parent

    It is kinda... (none / 0) (#22)
    by kdog on Tue Nov 11, 2008 at 07:56:49 AM EST
    a damned if you do and damned if you don't...I see your point.  Though I would hope a CEO wouldn't fire somebody with better ideas than they, the real world don't always work that way.

    Speak up and risk losing your job, or keep quiet while the company goes belly-up...either way you're unemployed.

    Parent

    Umm (none / 0) (#25)
    by cal1942 on Tue Nov 11, 2008 at 10:46:22 AM EST
    yeah people do fire people who are smarter than they are.  THAT'S the real world.

    If an employee, however productive, creative, intelligent, disagrees with the program; it's out in the street.

    It should be noted that discussions, even figurative brawls occur over policy.

    You go along because of economic necessity and the company you've gone along with won't necessarily go under.

    I find many things troubling regarding attitudes toward a "bailout" of the auto industry.  Beyond cutting our own throats by letting go of an important industry it should be noted that the Japanese, German and Swedish governments have, in the past, assisted and in some cases directly subsidized their respective auto industries.

    It should be clear (although many people appear to miss the point) that dumping indusries will put more peoople out of work than just the initially effected workers.  Everyone will be vulnerable whatever they do for a living, virtually no one is immune. It should be understood that we live in a very interdependent society.

    Parent

    so what you're saying is that the American (none / 0) (#26)
    by of1000Kings on Tue Nov 11, 2008 at 11:47:02 AM EST
    auto-industry is not a money maker, considering you seem to believe that no american investors would swoop in to take the part of the market that the current badly-run auto companies hold....

    so if it's not a money maker, then are we or are we not a capitalistic country?  I know I'm told that it is every day when I'm searching for one crappy job after another...but now we believe that it's only capitalistic on the consumer side, not the producer side...

    gotta love where this country is heading...

    Parent

    We are not a capitalist country... (none / 0) (#29)
    by kdog on Tue Nov 11, 2008 at 11:59:36 AM EST
    the best description I can come up with to describe our economic system is rigged market cronyism.

    Parent
    At this (none / 0) (#33)
    by cal1942 on Tue Nov 11, 2008 at 11:03:29 PM EST
    moment the auto industry is not making money. It has made money in  the past and will make money in the future. Chrysler was bailed out in the 70s. Paid back the loans in advance had more than two profitable decades.

    considering you seem to believe that no american investors would swoop in to take the part of the market that the current badly-run auto companies hold

    I'm not really sure what you mean here. If you're suggesting that there is some compulsion about that would build an auto industry to produce for a market not covered by American manufacturers, then I would suggest that you have no idea how terribly complex the auto industry is.

    At present American auto manufacturers are in crisis,first because of the poor economy and the credit squeeze. Foreign nameplate cars have also suffered huge sales losses. The market share lost by American manufacturers is the fault of shortsighted management. The lack of government run health care handicaps American manufacturers against foreign built makes as well as the American obsession to show high quarterly profits.

    I would bet good money on this:  Japan, Germany and South Korea would not allow their auto industries to fail.

    Still troubling is the reckless attitude among so many people to just allow the demise of an important industry.  The fall of any SINGLE one of the big three will cost more than 2 million jobs.  These aren't just auto industry jobs they are economy wide. Two few people really recognize the danger we're in, too many people seem to think that the loss of another industry won't affect them.

    If pure capitalism is what you seek you'll not find it anywhere. That's something we should all be thankful for.

    Parent

    you're assuming, though, that the (none / 0) (#34)
    by of1000Kings on Wed Nov 12, 2008 at 02:11:39 AM EST
    failing of one of these extremely poor run companies (and they have been at least since the 80's) is a failure of the industry...

    I see the failure of the company as just that, a failure of a company, leaving a hole in a market that will be inflooded by someone...investors are not just going to leave money on the table, that doesn't happen...if GM has a $2B dollar cap right now, then that's 2B that someone will want to make...

    I'm tired of rewarding failure...hell, even the CEO of GM came out and flat-out said that he wouldn't leave his job even with a government bailout, as he believes, somewhere in his delusional mind, that even though his poorly run company is running to 'borrow' money from the rest of us in this country so that he can maintain the huge salary he's had over the past few years, he actually believes that he's the best person for the job...lol...really?  are you not looking to the american people to help you save the company you've run into the ground?  and yet you don't believe that anyone in this country could have done the job better, or could do the job better in the future...if that really is the case it speaks very poorly of the American business man and the American business schools...

    Parent

    If you're going to respond (none / 0) (#36)
    by cal1942 on Wed Nov 12, 2008 at 09:33:44 PM EST
    and yet you don't believe that anyone in this country could have done the job better, or could do the job better in the future ...

    Respond without inventing thoughts.  I never said anything even remotely resembling what you claim I said or implied.

    You have no idea what I was saying and judging by your comments you simply can't get your mind around the concept of retaining American industry. It's not about a given CEO, it's about insuring that an important industry does not die. It's about the economy and the future of the nation. Attitudes like yours will ruin us all of us.

    Parent

    Then I must (none / 0) (#18)
    by cal1942 on Tue Nov 11, 2008 at 12:01:13 AM EST
    be a hillbilly and something like 7 of 10 or so other Michiganders must be hillbillies.

    I don't consider it hillbilly to support one's community.

    Parent

    Me either. I'm assuming most people (none / 0) (#30)
    by sarcastic unnamed one on Tue Nov 11, 2008 at 12:36:42 PM EST
    recognized it as snark.

    Parent
    And so (none / 0) (#17)
    by cal1942 on Mon Nov 10, 2008 at 11:52:20 PM EST
    you'd cheer allowing an American industry to simply fail?

    It would be different if that industry were creating buggy whips, a product that is not really needed.

    You're talking about ditching an industry that produces a product that we use and will use for many many years to come.

    You also seem to believe that dumping several hundred thousand more American workers is a swell idea.

    All because you don't like their product. Is that a valid reason?

    Parent

    Who is cheering? (none / 0) (#23)
    by kdog on Tue Nov 11, 2008 at 08:18:18 AM EST
    It will be a sad day when this industry goes belly-up...but that's what happens when you lose money year after year.  The auto-buyer at large doesn't like the product, and they have more overhead than their competitors.

    What is the alternative...several hundred billion in bailouts every year?  How long can we borrow from China to afford that?

    Parent

    Let them go bankrupt (none / 0) (#24)
    by Slado on Tue Nov 11, 2008 at 09:12:37 AM EST
    Then they can get out of the disaterous policies that are making them unsolvent.  

    The government is squeezing them from both ends.  Because of milage restrictions they are forced to build small, efficent cars.  Fine.  But then they have to build these cars in plants that aren't designed to build them and they loose up to $1,000 per car every time they make them.   Why?  Unions force them into cost structures, along with plant inneficiencies etc.. etc...

    Then their dealers have a strangle hold on them because every dealer can fall back on state laws regarding contracts and etc... so the big three can't drop them.

    On and on.  If they are allowed to declar bankruptcy, merge or one of them fails at least we will get a new beginning.

    Nothing in the bailout will allow them to fix their problems.  We will simply be providing corporate welfare.  

    Parent

    if we could trust the humans who (none / 0) (#27)
    by of1000Kings on Tue Nov 11, 2008 at 11:53:04 AM EST
    run companies to be human and do the right thing in terms of compensation for employment then unions wouldn't be needed...either pay your employees enough that they can go out and purchase their own insurance and retirement plan, or have it for them...I prefer the former but the CEO's don't like that idea much

    unfortunately we've learned that people at the top of the chain see people at the bottom of the chain as property or just numbers on a spreadsheet, and not as individuals...easily replaceable and thus not worthy of the same trappings as he/she at the top...equality, pfftt....what the hell is that?

    this may never change, hate and contempt seems to be a natural part of humans that even the most 'christian' allow to rule....

    Parent

    Bankruptcy... (none / 0) (#31)
    by kdog on Tue Nov 11, 2008 at 12:58:25 PM EST
    might alleviate the pension issue, but what of the piss-poor management issue?

    Parent
    Actually... (none / 0) (#32)
    by kdog on Tue Nov 11, 2008 at 03:51:06 PM EST
    hold the phone, don't cut that check!  In an amazing display of the short attention span of American consumers, SUV sales are on an uptick due to falling gas prices, and they men and women on the line are getting time and a half to keep up.  Link

    Parent
    I saw that today to... (none / 0) (#35)
    by of1000Kings on Wed Nov 12, 2008 at 02:17:47 AM EST
    sometimes I just can't help but giggle at the stupidity of the mass...

    what else can you do?  

    we are like dogs that eat our own poo...seriously...I guess we just all need to accept that, as we prove it to ourselves over and over again...

    I guess people don't like low gas prices after all...hopefully they won't complain when prices are back over 3.00 b/c people cannot just be effecient, they have to be superfluous because we lack in our hearts what can really make us content and we fill that hole with the contempt for others that the churches cultivate these days (they don't teach it, as it is something that humans seem to be born with, they just massage it with all the anti-this and ant-that)...

    Parent

    AIG is seeming like a black hole for cash (none / 0) (#1)
    by andgarden on Mon Nov 10, 2008 at 09:48:03 AM EST
    but I don't really know much about how the company is structured or where the money goes.

    What I've Read The AIG Problem Is... (none / 0) (#2)
    by santarita on Mon Nov 10, 2008 at 10:26:04 AM EST
    that the bailout loan was to be repaid from sale of subsidiaries.  With the credit crunch, no deals for sales were possible.  So it sounds to me like the original concept of a short term facility has turned into a long term facility with equity as a part of it.  This doesn't mean that AIG has become a sure loser.  But it does reflect on overall fragile state of finance.

    A Quiet Windfall For U.S. Banks (none / 0) (#20)
    by Amiss on Tue Nov 11, 2008 at 12:33:04 AM EST
    With Attention on Bailout Debate, Treasury Made Change to Tax Policy

    They are giving out much more than we were ever told would be and with no strings at all.They are also giving a windfall to US banks I bet most didnt know of either.
    But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion

    The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

     "Did the Treasury Department have the authority to do this?

    WaPo link isnt working for me tonite, but the article was written by Armit R. Paley on page A10.

    MORE

    "It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

    More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

    Several other tax lawyers, all of whom represent banks, said the change was legal. Like DeSouza, they said the legal authority came from Section 382 itself, which says the secretary can write regulations to "carry out the purposes of this section."
    Link for the above article, its about 4 pages (none / 0) (#21)
    by Amiss on Tue Nov 11, 2008 at 12:55:37 AM EST
    LINK

    "It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"


    Parent
    filter filter filter (5.00 / 1) (#28)
    by of1000Kings on Tue Nov 11, 2008 at 11:58:52 AM EST
    all that money up up and away...

    isn't that what our government was set up to do, to ensure that a select number of individuals have bank accounts that grow and grow and grow at the expense of the rest of the country?  of course it is, why else would we have a federal government if the sole purpose wasn't just to keep the whole of the country in line while filtering billions and billions of dollars to .5% of the population...as they are the kings, the saints, the superiors and we are just the sheep....

    this bailout plan is just getting dirtier and dirtier...how the congress will ever wash their hands is beyond me....

    now we have American Express filing as a bank holding company so that it can get in on the action...friggen ridiculous...

    the general populations' butt is starting to feel like it's in a high-security prison with all the shower fun this government is having with it...
    too bad most people are too caught up in their tedious lives to really care...

    Parent

    Fannie Mae Posts 29 Billion Loss | 36 comments (36 topical)

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