Fannie & Freddie Still Too Big To Fail at Least Through 2012; Treasury Banking on Mayan Apocalypse

The time for talk is over. The time for unlimited bailouts of the government-sponsored (and like totally p*wned, dude!) enterprises is now:

The U.S. Treasury Department will remove the caps on aid to the largest U.S. mortgage-finance companies for the next three years, to allay investor concerns that the companies will exhaust the available government assistance.

The two companies are currently under government conservatorship and have caps of $200 billion each on backstop capital from the Treasury. Under a new agreement announced after markets closed on Dec. 24, these limits can rise as needed to cover net worth losses through 2012.

Mo' here. I for one am glad that unlimited credit has been made available to the super-responsible types at the very agencies that literally underwrote the economic turbulence that my kids will still be paying for on their 200th birthdays.

Return now to those thrilling days of yesteryear, when easy-credit ripoffs were blamed for the troubles we got:

We've lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save.

Who said it? The answer won't surprise you.

And remember boys and girls: It's always a good time to buy!

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  • ||

    Rahm Emanuel is a shoo-in for CEO of Fannie Mae when he leaves the White House to "pursue other interests".

  • OMG||

    Given the goodness he already done brought to its sister corp, why not?

    "President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com."

  • ||

    The U.S. Treasury Department will remove the caps on aid to the largest U.S. mortgage-finance companies for the next three years, to allay investor concerns that the companies will exhaust the available government assistance.

    Or, more likely: "...to allay investor fears that nobody will step in and overpay for nearly worthless assets, in order to prop up the banks' balance sheets."

  • Death Panelist||

    200th birthday? Someone has high hopes for the effectiveness of Obamacare.

  • EJM||

    FWIW, this was (sort of) covered last week.

  • alan||

    Ah, that link

    http://reason.com/blog/2009/01.....t-can-brea

    brings us back to the halcyon yesteryear when the Keynesian faddist were telling us that due to market failure only government spending can bring the economy back, the market being to slow to do so would be too painful for the people to weather. What is the new mantra? 'Give the stimulus time to work!'

  • ||

    Under a new agreement announced after markets closed on Dec. 24, these limits can rise as needed to cover net worth losses through 2012.

    In other words, the housing market stays on lfie support until after the next election.

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