Archive for the ‘Freddie Mac’ Category

Richard Russell’s Daily Letter

August 9, 2010 — Headline from page one, New York Times, Aug. 7: “Nation Lost 131,000 Jobs As Governments Cut Back. Hiring By Private Sector Anemic in July.”

Headline from the Weekend Investor section of the August 7 Wall Street Journal“How To Beat Deflation. Strategies to Protect Your Portfolio From and Take Advantage of the — Dreaded ‘D’ word.”

The specter of deflation is cropping up in many media outlets today. In fact, I’d say that deflation talk has almost become popular. The key question is this — Fed Chief Bernanke is obviously reading and hearing all about the “coming deflation.” What will Bernanke do about it? I think he will fight deflation with all the weapons at his command. And Bennie has a lot of weapons, least of which is printing “money.”

The air is filled with rumors and contrary opinions, so many that it is literally impossible to follow them all. Some of the opinions and views have such earth-shaking implications that it’s difficult to ignore them. But as my subscribers know, we’re not a news site, and we don’t invest or divest based on the news of the day.

A few examples — I just finished my friend, John Mauldin’s always excellent column (how does he travel continuously and write the column?). Rather than paraphrase what John is writing, I’m including an actual segment from John’s latest column —“Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages are implicated.”
Russell Comment. Would Obama actually do this? My answer is that Obama and his buddies are so frantic to get the economy moving again that they would be willing to try anything.
Beyond mortgages, Americans are so loaded with debt that maybe the next Obama step would be to forgive ALL personal debts in the US. Better still, why not return to the year of Jubilee and cancel out ALL world debts (I don’t think holders of US Treasuries would go for that one).
The current issue of Barron’s is fascinating. The inimitable Alan Abelson notes that stocks are not cheap. Alan asks, “Where is it written that a market that in a not too distant-past values stocks at 60 time earnings, can’t value them, if the outlook sours, at six to eight times earnings?”
Russell Comment — Yes, I have noted that the big booster in bull markets and the big killer in bear market is the change in price/earning ratios, rather than the actual change in earnings.
But here’s what I really want to talk about. From the cover page of Barron’s — “Why the Fed Will Soon Print $2 Trillion.” The related major article is entitled, “Time to Print, Print, Print,” and is written by Jonathan R. Laing. The author believes that the Fed has only one way to go, “Quantitative easing,” and maybe printing another $2 trillion of fed notes (dollars). Laing concludes, “so it’s more than likely that the big artillery of quantitative easing will be unleashed to push the economy out of its despond. It’s high time to get out the money-printing machines. Damn the risks of triggering a bit of inflation and some modest investment bubbles. The alternatives are far worse.”
Then (believe it or not) in the same issue of Barron’s we see an article by my old friend, Robert Prechter, the guru of the Elliott Wave thesis. Robert explains how a great contraction in credit and debt will bring about deflation. Robert notes that the amount of dollar-denominated debt worldwide is some $57 trillion. . . The already-issued debt and potential debt is poised to overwhelm the possibility of management monetization. The Fed’s assets amount to $2.3 trillion, a drop in the global debt bucket.”
Robert concludes his frightening article as follows — “If you are positioned for more inflation — as the vast majority of investors are — you are likely to find yourself on the wrong side of the monetary bet. Positioning for deflation simply means avoiding traditional investments, especially risky debt, and maintaining maximum safety in cash equivalents, held in the safest institutions. If you shed market and institutional risk, you can sail through deflationary times unscathed.” 

Russell Comment — Whew, how’s that for a scary contrary opinion? Robert believes that way to safety in a deflation is to have cash, and lots of it. My concern with this approach is that I question the safety of the US dollar (and all fiat money, for that matter). So in an all-out deflation, Robert Prechter will be sitting in all cash or US Federal Reserve notes. But the dollar is collapsing, and with a US that is deflating, none of our foreign creditors will want dollars (in fact, they will be trying to get rid of dollars). With fiat money in retreat all over the world — and currencies devaluing against each other, the world’s peoples will turn to the only money they can trust — gold. I’m aware that Prechter believes gold will be heading down in a deflation, I disagree.

I was there during the Great Depression, and I can tell you nobody at that time had dollars. But if you did have dollars they were trusted and they were considered as good as gold. Today, it’s different. The very validity of the dollar is in question.

By the way, Prechter believes the Dow will end its bear market at a value of 400. If so, Prechter is looking for a calamity comparable to the Great Depression of the 1930s. 

Russell response — I distrust all scenarios and predictions, although I read ’em all and find many of them fascinating. In the end, I only trust the wisdom of the stock market. I haven’t liked the recent action of the stock market, and I’ve advised my subscribers to get out of stocks. From our standpoint, when it comes to news events, our main interest is not in the news, but in the stock market’s reaction to the news.

The stock market will tell its story as we go along and in its own good time. Our job is to ignore all opinions and forecasts and to follow the stock market and believe what it’s telling us.

Gold has advanced seven days in a row, and should be ready to back off a bit. The many arguments and rumors regarding gold are almost deafening. I don’t give a damn what the gold bulls or the gold bears say, I follow the price action as best I can. Often, the best test — is what an item can or can’t do. On the latest correction, gold held 1100 — bullish. Can Dec. gold climb into the 1300s, which would be a record high? That’s what I’m waiting to see. By the way, gold may be forming a head-and-shoulders bottom. More technicals — the 200-day moving average for is at 1155.10. The 50-day MA for Dec. gold is at 1215.90, which is bullishly above the 200-day MA. If Dec. gold can close above 1215.90, that would be a bullish development.

The Federal Open Market Committee meets tomorrow. Will they hold interest rates at zero and will they accelerate their printing? If they do, it will put pressure on the dollar and it will be bullish for gold. If they boost interest rates, expect gold to correct.


My PTI was up 7 at 6117. The moving average at 6095, so my PTI is bullish by 22.
The Dow was up 45.19 to 10698.75.
Transports were up 59.09 at 4516.35.

Utilities were up 1.30 to 395.02.

NASDAQ was up 17.22 to 2305.69.

S&P was up 6.15 to 1127.79.

September crude was up 0.78 at 81.48.
Total Volume on the NYSE and associated exchanges was 3.43 bn.

There were 2199 advances and 830 declines on the NYSE.

There were 305 new highs and 15 new lows
The Big Money Breadth Index was up 4 at 807.

Dollar Index was up 0.26 at 80.67. Euro was down 0.49 at 132.25. Yen was down 0.60 to 116.48. Currency prices as of 1 PM Pacific Time.

Bonds: Yield on the 10 year T-note was 2.82. Yield on the long T-bond was 4.01. Yield of the 91 day T-bill was 0.14%.

December gold was down 2.70 to 1202.60. September silver was down 0.23 to 18.24.

My Most Active Stocks Index was up 2 to 200.

GDX was up 0.02 to 50.19.

HUI was down 0.22 to 459.72.

CRB Commodity Index was down 0.12 at 274.59.

The VIX was up 0.40 to 22.14.

Late Notes — Dow up 45, Trannies up 59, Utes up almost 2. It’s increasingly more difficult to be bearish on this market when my PTI remains bullish. It was up 7 today to 6117, making my PTI bullish by 22 points. As for the “internals,” well you heard the PTI report. NYSE breadth was good, 2199 issues higher, only 830 down, 305 new highs and 15 new lows. Up volume on the NYSE was an impressive 71% of up + down volume. 

Dollar Index was up 0.26 to 80.67. Are there too many bears on the dollar. When the shorts overdo it, you know what happens — the item goes UP. Bonds were slightly lower. Dec. gold was down 2.70 to 1202.60, but still holding above 1200. Tomorrow Bernanke and the gang meet for the Fed Open Market Committee, and everybody is waiting breathlessly to hear what the gang comes up with. 

My pen-pal, the one and only Dennis Gartman notes that the M-2 is diving and that the adjusted monetary base has gone nowhere for the last nine months. John Williams reconstructs the broad M-3 money supply and shows that it is diving. So what’s going on — is the Fed playing games with us? Can the market and the economy go up without a rising money supply?

Never mind, we go by the action of the market, and so far, the action has been OK, although a bit ragged. 

See you tomorrow, with diamonds hidden in my hair — wait, Faye just cut most of my hair off. I’m walking around with a buzz cut, can this be me?



Expensive stones, most of them over one billion years old.

With the advent of GIA (Gemological Institute of America) certificates, diamonds are becoming a leading safe-haven item. You can send a diamond to the GIA and get a recognized certificate showing the cut, carat, color and clarity of your diamond. Seasoned buyers will not buy a diamond without a GIA “cert.” These certs have finally put diamonds in a different category. You can now buy a diamond a receive (with a cert) a close approximation of what the stone is worth.

India is fast becoming the center of diamond cutting and trading. The best diamonds have come from the Golconda area of India. The Golconda diamonds were “whiter than white.” By the way, the Golconda mines are exhausted. The lower the nitrogen content of a diamond, the whiter the stone is. Golconda diamonds have a nitrogen content of 2% to down to 1%, making them the whitest of all diamonds. Actually, a few other diamonds sport this low nitrogen content, and despite the fact that they don’t come from India, they are still called Golconda diamonds. Only about 1% of all diamonds are classified as Type IIA or Golconda diamonds. These special diamond bring huge prices. For instance, a well-cut internally flawless Type IIA diamond of 5 carats may sell for over one million dollars. 

As a rule, white diamonds are judged on their whiteness — the whiter, the better. Colored stones are judged by the depth of their color and the evenness of their color throughout the stone. 

Diamonds as a safe haven have one big advantage over gold. Millions of dollars worth of stones can cross a border hidden in a tiny packet or sewed into the lining of your pants. And with the advent of GIA certs, you can be reasonably assured of what they are worth. High-grade stones are so hot today that dealers have been calling retailers and asking them if they have any overage in their diamond inventory. There is almost no bargain diamonds for sale today. The best deals are seen when a professional outfit buys a diamond from a private party, a party that knows nothing about the value of their diamond. 

Thus you see ads in the newspapers as follows: “We want your gold and jewelry and particularly your diamonds. Nobody pays higher prices than we do.”

The MasterBlog

From The New York Times:

Home Sales in April Top Expectations

Sales of previously owned homes rose 7.6 percent in April, aided by a tax credit for first-time buyers.

Home Sales in April Top Expectations
Published: 25 May 2010
WASHINGTON (AP) — Home sales in April surpassed expectations as government incentives provided a temporary lift to the housing market.
The National Association of Realtors said Monday that sales of previously owned homes rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million. That was the best showing in five months and better than the 5.63 million units economists had expected.
The increase in sales ignited a rise in home prices. The median price for a new home rose to $173,100, up 4 percent from a year ago.
The federal government provided a lift to home sales this spring by offering first-time buyers a tax credit of up to $8,000. Homeowners looking to upgrade could qualify for a credit of up to $6,500. The deadline for getting a signed sales contract was April 30.
Sales were up in all parts of the country except the West. The gains were led by a 21.1 percent jump in the Northeast and a 9.9 percent rise in the Midwest. Sales also rose 8.6 percent in the South.
The only region of the country that saw sales decline was the West, where sales dropped 6.2 percent from March.
The big question facing the housing market is what happens now that the government’s tax credits have expired.
“No doubt there will be some temporary fallback in the months immediately after it expires,” said Lawrence Yun, chief economist at the Realtors.
But Mr. Yun said that the improving economy has led to an upswing in consumer confidence, which should help support sales in the months ahead.

Incredible how it just doesn’t stop!

From The New York Times:
Fannie Mae Seeks Another $8.4 Billion in Aid
The mortgage finance giant reported a $13 billion loss in quarter and said it needed help to cover mounting losses.

May 10, 2010

For Administration, an Ill-Timed Request for Aid

WASHINGTON — Fannie Mae’s request on Monday for another $8.4 billion in federal aid comes at a politically inconvenient time for the Obama administration, which is pressing to pass sweeping financial legislation without resolving the company’s future.
The government has already transfused $137.5 billion into Fannie Mae and its cousin, Freddie Mac, since seizing the two mortgage financing giants in August 2008. The money covers losses on mortgages that the companies bought or guaranteed during the housing boom, allowing them to continue buying new loans.
Democrats want to defer an overhaul of federal housing policy until next year, after the midterm elections. But Republicans have seized on the continuing losses to argue that a plan for the two companies should be a priority of the current legislation.
It is an argument that Democrats have struggled to deflect. “I think it’s a fair claim to make to say we haven’t done enough to address Fannie and Freddie,” Senator Mark Warner, Democrat of Virginia, said in an interview on CNBC Monday. “It is the big elephant in the room.”
Mr. Warner then reiterated his party’s position that that it would be better to return to the issue next year “in a more thoughtful way.”
Republicans, meanwhile, tied up debate on the financial bill last week with speeches in favor of an amendment proposed by Senator John McCain of Arizona requiring the government to sever ties with the companies within five years. Fannie and Freddie would then be left to fend for themselves as private companies.
“The time has come to end Fannie Mae and Freddie Mac’s taxpayer-backed slush fund and require them to operate on a level playing field,” Mr. McCain said.
Fannie Mae and Freddie Mac were created by Congress to reduce the cost of home ownership. The companies buy mortgage loans from banks and other lenders, freeing up money for another round of loans. By providing a guaranteed return, the companies also allow lenders to charge lower interest rates.
During the housing boom, the companies used their profits to build portfolios of investments in high-risk mortgage loans, which are now losing value.
Fannie Mae said Monday that it lost $11.5 billion in the first quarter compared with a loss of $23.2 billion a year ago.
The company essentially became the world’s largest investor in mortgage loans, and its losses reflect the vast numbers of Americans who continue to default.
One consequence is that Fannie Mae now owns real estate worth $11.4 billion. The company said it acquired 61,929 single-family homes in the first quarter alone.
Freddie Mac said last week that it lost $8 billion in the first quarter. It asked for another $10.6 billion in federal assistance.
For now, the quarterly requests are a formality. The Obama administration committed late last year to cover all losses by the two companies through 2012, replacing an earlier promise to cover losses up to $400 billion over that same period.
The total losses are not expected to cross that threshold, but the companies’ prospects remain grim. Both said in first-quarter filings that they could not foresee any reasonable prospect of a return to profitability.
At the same time, the companies have become more important to the health of the housing market as private sources of mortgage funding evaporated almost completely during the financial crisis. Those sources have yet to make a significant comeback.
The government directly or indirectly provided financing for 96.5 percent of mortgage loans in the first quarter, according to the trade publication Inside Mortgage Finance.
Representative Barney Frank, Democrat of Massachusetts, argued in a memo to other leading Democrats last week that it was important to distinguish between the companies’ past mistakes and their present contributions to the health of the housing market.
While the losses that they are experiencing on old loans are unavoidable, Mr. Frank said the companies already had tightened lending standards to reduce future defaults.
“This is an important point that has to be repeated — as Fannie and Freddie operate today, going forward, there is no loss,” Mr. Frank wrote. “The losses are the losses that occurred before we took the first step towards reforming them — we the Democrats — and nothing we could do today will diminish those losses.”
Peter J. Wallison, a fellow in financial policy at the American Enterprise Institute, said it was true that the government could do nothing to stem the losses in the short term, but that it was a mistake not to decide the companies’ future as soon as possible.
“Right now we have a consensus that something needs to be done,” Mr. Wallison said. “The sensible thing to do is to put Congress in a position where they have to act within a certain period of time.”
Pushing the debate into the future, he said, created the risk that Congress would pass the present bill, congratulate itself on addressing the financial crisis, and lose its appetite for the difficult question of what do about Fannie and Freddie.

Sent from my iPad

Banks Hold 9 Years of Housing Inventory

Tim Iacono submits:

I wonder how many homebuyers in the U.S. who, at this very moment, are rushing to get their sales contract signed before the government’s $8,000 tax credit expires on Friday, have even considered the relative importance of the tax credit today and the future impact of the foreclosure pipeline as illustrated in the chart below from this WSJ story.
As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments … Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload.

The report goes on to note that the the government is worried about the situation, in part because their wildly un-successful Home Affordable Modification Program has been one of the major factors behind the inventory buildup.

Banks Hold 9 Years of Housing Inventory — Seeking Alpha


April 20, 2010

How Paulson created toxic debt

Special to Globe and Mail Update

An excerpt from Wall St. Journal reporter Greg Zuckerman’s book on the collapse of the subprime mortgage market

Excerpted from The Greatest Trade Ever by Greg Zuckerman.
Also read a Q&A with the author: Author Zuckerman on Goldman case []
John Paulson, focused on creating a huge trade, soon took a controversial step that would lead to some resentment for his role in indirectly contributing to more toxic debt for investors.
Paulson and Pellegrini were eager to find ways to expand their wager against risky mortgages; accumulating it in the market sometimes proved a slow process. So they made appointments with bankers at Bear Stearns, Deutsche Bank, Goldman Sachs, and other firms to ask if they would create CDOs that Paulson & Co. could essentially bet against.
Paulson’s team would pick a hundred or so mortgage bonds for the CDOs, the bankers would keep some of the selections and replace others, and then the bankers would take the CDOs to ratings companies to be rated. Paulson would buy CDS insurance on the mortgage debt and the investment banks would find clients with bullish views on mortgages to take the other side of the trades. This way, Paulson could buy protection on $1-billion or so of mortgage debt in one fell swoop.
Paulson and his team were open with the banks they met with to propose the idea.
“We want to ramp it up,” Pellegrini told a group of Bear Stearns bankers, explaining his idea.
Paulson and Pellegrini believed the debt backing the CDOs would blow up. But Pellegrini argued to his boss that they should offer to buy the riskiest slices of these CDOs, the so-called equity pieces that would get hit first if problems resulted. These pieces had such high yields that they could help pay the cost of buying protection on the rest of the CDOs, Pellegrini said, even though the equity slices likely would become worthless over time, as the debt backing the CDO fell in value.
And if their analysis proved wrong and the CDOs held up, at least the equity investment would lead to profits, Pellegrini said.
“We’re willing to buy the equity if you allow us to short the rest,”
Pellegrini told one banker.
To try to protect themselves, the Paulson team made sure at least one of the CDOs was a “triggerless” deal, or a CDO crafted to be more protective of these equity slices by making other pieces of the CDO more likely to take early hits. Paulson’s goal was to make the equity piece a bit safer, but this step made the other parts of the triggerless CDO even more dangerous for anyone with the gumption to buy them.
He and Paulson didn’t think there was anything wrong with working with various bankers to create more toxic investments. Paulson told his own clients what he was up to and they supported him, considering it an ingenious way to grow the trade by finding more debt to short. After all, those who would buy the pieces of any CDO likely would be hedge funds, banks, pension plans, or other sophisticated investors, not momand- pop investors. And if these investors didn’t purchase the newly created CDOs, they’d likely buy another similar product since there were more than $350-billion of CDOs at the time.
However, at least one banker smelled trouble and rejected the idea.
Paulson didn’t come out and say it, but the banker suspected that Paulson would push for combustible mortgages and debt to go into any CDO, making it more likely that it would go up in flames. Some of those likely to buy the CDO slices were endowments and pension plans, not just deep-pocketed hedge funds, adding to the wariness.
Scott Eichel, a senior Bear Stearns trader, was among those at the investment bank who sat through a meeting with Paulson but later turned down the idea. He worried that Paulson would want especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team.
Either way, he felt it would look improper.
“On the one hand, we’d be selling the deals” to investors, without telling them that a bearish hedge fund was the impetus for the transaction, Eichel told a colleague; on the other, Bear Stearns would be helping Paulson wager against the deals.
“We had three meetings with John, we were working on a trade together,” says Eichel. “He had a bearish view and was very open about what he wanted to do, he was more up front than most of them.
“But it didn’t pass the ethics standards; it was a reputation issue, and it didn’t pass our moral compass. We didn’t think we should sell deals that someone was shorting on the other side,” Eichel says.
For his part, Paulson says that investment banks like Bear Stearns didn’t need to worry about including only risky debt for the CDOs because “it was a negotiation; we threw out some names, they threw out some names, but the bankers ultimately picked the collateral. We didn’t create any securities, we never sold the securities to investors. . . . We always thought they were bad loans.”
Besides, every time he bought subprime-mortgage protection, someone had to be found to sell it to him, Paulson notes, so these big CDOs were no different.
Indeed, other bankers, including those at Deutsche Bank and Goldman Sachs, didn’t see anything wrong with Paulson’s request and agreed to work with his team. Paulson & Co. eventually bet against a handful of CDOs with a value of about $5-billion.
Paulson didn’t sell any of these products to investors. Some investors were even consulted as the mortgage debt was picked for the CDOs to make sure it would appeal to them. And these deals were among the easiest for an investor to analyze, if they so chose, because they were “unmanaged”
CDOs, or those in which the collateral was chosen at the outset and not adjusted later on like other CDOs. It wasn’t his fault that others were willing to roll the dice.
A few other hedge funds also worked with banks to create CDOs of their own that these funds could short-so Paulson wasn’t doing anything new. Nor did Paulson’s moves create more troubled mortgages or saddle borrowers with additional losses-the deals were CDOs composed of CDS contracts, rather than actual mortgage bonds.
“We provided the collateral” for the CDOs, Paulson acknowledges.
“But the deals weren’t created for us, we just facilitated it; we proposed recent vintages of mortgages” to the banks.
But some investors later would complain that they wouldn’t have purchased the CDO investments had they known that some of the collateral behind them was chosen by Paulson and that he would be shorting it. Others argued that Paulson’s actions indirectly led to more dangerous CDO investments, resulting in billions of dollars of additional losses for those who owned the CDO slices when the market finally cratered.
In truth, Paulson and Pellegrini still were unsure if their growing trade would ever pan out.
They thought the CDOs and other risky mortgage debt would become worthless, Paulson says. “But we still didn’t know.”
Later… Paulson & Co. had bet against about $5-billion of CDOs and made more than $4-billion from these trades-including $500-million from a single transaction-according to the firm’s investors and an employee of the firm. One of the biggest losers, however, wasn’t any investor on the other side. It was the very bank that worked with Paulson on many of the deals: Deutsche Bank. The big bank had failed to sell all of the CDO deals it constructed at Paulson’s behest and was stuck with chunks of toxic mortgages, suffering about $500-million of losses from these customized transactions, according to a senior executive of the German bank.
These were some of Paulson & Co.’s largest scores.

Excerpted from The Greatest Trade Ever by Greg Zuckerman; Broadway Books, Copyright @2009.

How Paulson created toxic debt – The Globe and Mail

Freddie Pays Big for New CFO

Submitted by Bruce Krasting  on on 09/25/2009 03:32 +0200

Mr. Ross Kari has been appointed as CFO of Freddie Mac. He is getting a big paycheck.

Freddie Mac does not need a CFO. What is Mr. Kari going to do with his time? Freddie is in conservatorship. It is a ward of the state. He is not going to be doing any special transactions that justify this big nut for the taxpayers. Freddie borrows short term from Treasury to fund their portfolio; they sell their MBS and unsecured bonds to the Fed. What’s so complicated about that?

The whisper from D.C. is that something will be on the table for all of the Agencies by next March. Mr. Kari is likely to be out of a job by then. For his sake I hope he has a big parachute. On the flip side, if he does, there will be hell to pay.

Freddie is no longer a public company that has a big stock float or a presence on Wall Street. It has no earnings, only losses. It should be de-listed. This is not a Citi where there is a remote hope of a soft landing. Freddie is toast. There will be no stockholders meetings where Mr. Kari will be called on to report the success and progress at Freddie. It is unlikely that Freddie can even pay the dividend it owes to Treasury. They are losing $2+ billion a month. That number would be higher, but they are burying their losses by providing ReFi loans at 125% LTV. Half of these new loans go into default in less than one-year.

Freddie hired Mr. Kari to bring someone solid on board. That cost them. Freddie has plenty of talented people who can operate this ship for the next six months. This thing is on autopilot. The only reason Freddie did this (with the blessing of FHFA) is that they wanted to try to demonstrate that they had the right “team” to be the survivor Agency. This hire was about optics, not substance.

Mr. Kari is ex CFO of Fifth Third Bank. That makes him a player, but let’s not forget that Fifth Third took $3.4 billion in TARP money. This is what he had to say about repaying that loan back in July:

Fifth Third Bancorp’s Chief Financial Officer Ross Kari said the Cincinnati bank would wait until the economy improves until it would repay cash from the government.

Freddie needs to be absorbed by HUD. I think they will be. There is not much room for this pay grade at HUD. The President makes $400k, Senators $174k, Bernanke and Geither get $191k.

Who is making these choices? Who is approving them? Is anyone watching the store?

Posted by Bruce Krasting at 6:05
Freddie Pays Big for New CFO

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