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Signs of an improving housing market, Freddie Mac reports Q2 income of $3B, led by a $1.7B...

Signs of an improving housing market, Freddie Mac reports Q2 income of $3B, led by a $1.7B quarterly decline in credlit loss provisions. The profit allowed the agency to make its $1.8B preferred dividend payment to Treasury without needing to take a draw from the Treasury. Wonderful. (PR)
Comments (4)
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    "The profit allowed the agency to make its $1.8B preferred dividend payment to Treasury without needing to take a draw from the Treasury. Wonderful."

     

    I never thought I would see the day when payments of "dividends" from one government agency to another was a sign of economic health.

     

    How long until the stories circulate about the "profits" the Treasury is making from its "investment" in Fannie and Freddie?
    7 Aug 2012, 10:18 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (7838) | Send Message
     
    Imagine the profits Freddie could book if Congress made them pay only a 5% dividend like the other institutions.

     

    By the way, Freddie (and later, Fannie) profitability means ZERO chance of structural reform no matter who wins the election.

     

    The status quo has won!
    7 Aug 2012, 11:15 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    The 10% div to the govt is outrageous. They treated AIG, GM shareholders among others much differently. I say charge a market return, but don't delay FNM/FRE return to profitability due to high usury rates.

     

    Anyway, the FNM/FRE preferreds look very tempting as the govt decides what to do with a profitable company in conservatorship.
    7 Aug 2012, 10:30 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    The other crazy thing the govt does to FNM/FRE is that they force them to borrow from the US treasury, not when they actually need capital, but when their net worth drops below zero. FNM/FRE can have plenty of cash flow to cover their outflows, but as long as the balance sheet shows zero NET worth, they make them buy more preferreds with a 10% coupon.
    7 Aug 2012, 12:19 PM Reply Like
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