Fannie, Freddie, GMAC And AIG: Biggest Mortgage Backers Look Like 'Long-Term Wards Of The State'

Even as the biggest banks repay their government debt in what is being heralded as a successful rescue program, four troubled giants of the financial world remain on government life support.

These companies, the American International Group, Fannie Mae, Freddie Mac and GMAC, are not only unable to repay the government, they are in need of continuing infusions that make them look increasingly like long-term wards of the state.

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Comments

[kdp59]

08:59 AM on 12/18/2009

so can anyone explain to me what happens if we turn off the taxpayer spicket?

If these companies fail what would that mean?

The way I understood it, back when the AIG bailout happened, it was said that they held insurance to the BANKS fo rall that toxic "crap" Mortgage paper that the bankers created and then sold to each other.

So I understand that back then, with the banks tettering the politico's thought there was no option than to bail out AIG, so they could PAY off the insurane (why the banks didn;t have to take a haircut, you'll have to ask little TIIMMY G.)

but what happens NOW if EACH of these companies are told to get off the teat and go belly up?

can anyone help me here, point me to a websote or something?

[Samalabear]

09:00 AM on 12/30/2009

I think you answered your own question. Either they'll go belly up, or maybe the guys at the top of these corporations will finally have to stop being paid millions in salaries. When the Pres makes $400,000, the Treasury Secretary makes $191,000 (I read somewhere yesterday), and I'm not sure what the CEO of Costco is making now, but a very few short years ago his salary was $350,000, there is no reason why these CEOs should be paid this kind of money. The CEOs of Fannie and Freddie are getting what, something like $6 million, I read yesterday? Why are we Americans so stupid?

[nopilikia]

04:46 PM on 12/17/2009

Time for some good old fashion capitalism we keep hearing about. Let the market decide who survives and who fails. Not U.S. taxpayer money.

[invest in jobs]

04:41 PM on 12/17/2009

Americans are more pessimistic now according to a recent study today about the economy then they were in jan 2009- even before all the greenshoots BS.
hat tip to; http://financeopinionss.blogspot.com

The working classes have seen declining real incomes for many years – something that was hidden due to excessive bank credit. We are running deficits equal to 15% of our GDP just to keep job losses from becoming worse.

[comicpro]

03:32 PM on 12/17/2009

Let them fail.

[invest in jobs]

12:31 PM on 12/17/2009

Bernanke & the employees at Goldman are a bunch of rat basta4rds
good articles; http://financeopinionss.blogspot.com

It's despicable what's going on

[sheilaofmiami]

12:27 PM on 12/17/2009

now the first two are still sort of government corporations, always were. They took the worst of the real estate hit because they were under orders to make loans they should not have.

The other 2 should be sliced and diced into nice bite sized pieces.

[mcmutter]

11:46 AM on 12/17/2009

lets all say it together....

these companies need government regulation and oversight so they don't hurt themselves ....

[nopilikia]

04:50 PM on 12/17/2009

Please mcmutter, not in front of the children, errrrrrrrr I mean bankers.

[Papa Swamp]

11:23 AM on 12/17/2009

Wait until Ginnie Mac comes out for money....the commercial side is a nightmare.

[Samalabear]

09:01 AM on 12/30/2009

Yep, we ain't seen nothing yet.