It’s always nice to be reminded of how far we’ve come since the dark days of 2008/09 ,when American plebs involuntarily bailed out the oligarchy generally, and Wall Street specifically, to the tune of trillions. Sure, all the gains went to the 0.001%, but the wounds have healed, and we’re in the midst of a stellar economic recovery.
The latest proof of how far we’ve come was laid bare by an article in the Wall Street Journal:
The report from the inspector general for the Federal Housing Finance Agency, which regulates Fannie and Freddie, warns that the companies’ declining profits and capital cushions could leave them vulnerable in the event of an economic downturn.
The U.S. government took over Fannie and Freddie in 2008, eventually injecting $187.5 billion in bailout money into the two.
But Fannie and Freddie last month reported weak earnings for the fourth quarter. Fannie recorded net income of $1.3 billion, compared with $6.5 billion in the same quarter a year earlier. Freddie posted a profit of $227 million, down from $8.6 billion.
The disappointing results were mainly due to the accounting treatment of the companies’ derivatives as well as fewer one-time items to bolster income.
The inspector general’s report noted that for the past few years, Fannie and Freddie’s net income has been driven by major legal settlements as well as the revaluation of tax assets and other one-time items that aren’t sustainable. That, along with the companies’ declining capital cushion, increases the likelihood they could need more government money in the future, the report said.
Left to their core business of collecting fees in exchange for guaranteeing the repayment of mortgages, Fannie and Freddie are more vulnerable to losses, especially in the event of another economic downturn, the inspector general’s report said.
Another economic downturn? I thought we banned those.
The FHFA received a copy of the inspector general’s white paper but didn’t give a response. An FHFA spokesman declined to comment.
Oh well, what’s a couple billion between oligarchs. It’s not as if the U.S. government is known for its ability to keep track of funds…or weapons for that matter. Such as the $500 million of military equipment that recently went missing in Yemen, and is feared to have come into al-Qaeda’s possession.
From the Washington Post:
The Pentagon is unable to account for more than $500 million in U.S. military aid given to Yemen, amid fears that the weaponry, aircraft and equipment is at risk of being seized by Iranian-backed rebels or al-Qaeda, according to U.S. officials.
With Yemen in turmoil and its government splintering, the Defense Department has lost its ability to monitor the whereabouts of small arms, ammunition, night-vision goggles, patrol boats, vehicles and other supplies donated by the United States. The situation has grown worse since the United States closed its embassy in Sanaa, the capital, last month and withdrew many of its military advisers.
In recent weeks, members of Congress have held closed-door meetings with U.S. military officials to press for an accounting of the arms and equipment. Pentagon officials have said that they have little information to go on and that there is little they can do at this point to prevent the weapons and gear from falling into the wrong hands.
As a result, the Defense Department has halted shipments to Yemen of about $125 million in military hardware that were scheduled for delivery this year, including unarmed ScanEagle drones, other types of aircraft and Jeeps. That equipment will be donated instead to other countries in the Middle East and Africa, the defense official said.
Yeah, I’m sure that won’t end up in the wrong hands. Brilliant idea.
Although the loss of weapons and equipment already delivered to Yemen would be embarrassing, U.S. officials said it would be unlikely to alter the military balance of power there.
Right, because “embarrassing” is the best way to describe $500 million of U.S. weaponry falling into the hands of al-Qaeda.
Just last year, President Obama touted Yemen as a successful example of his approach to combating terrorism.
U.S. government officials say al-Qaeda’s branch in Yemen poses a more direct threat to the U.S. homeland than any other terrorist group.
You really can’t make this stuff up.
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