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Interest Payment Are Not Profits

Saturday, 06 November 2010 11:42
Come on folks, the government did not make "a profit of $1.1 billion in the third quarter on its huge bailout of the mortgage finance giants Fannie Mae and Freddie Mac," as the NYT told us this morning. This money was the interest paid on the money that the government lent to the mortgage giants to keep them solvent. The government is still almost $140 billion in the hole on this deal, as is noted later in the piece.
Comments (2)Add Comment
written by izzatzo, November 06, 2010 8:43
From the NYT article, these two quotes:
The federal government made a profit of $1.1 billion in the third quarter on its huge bailout of the mortgage finance giants Fannie Mae and Freddie Mac, even as the two companies continued to lose money on bad loans. ...

... In the meantime, to keep the companies in business, the government provides enough money each quarter to balance their books. In exchange, the companies must pay the government a quarterly dividend. The companies have now absorbed $152.8 billion in taxpayer aid and returned $16.5 billion in dividend payments.

Bubba, put the counterfeit printing press away. We're going back into housing and set up some stings for Fannie and Freddie. Reverse flipping and negative dividend profit is the next big thing.
It sells papers
written by Scott ffolliott, November 06, 2010 10:10
It sells papers

Hard times have fallen on the New York Times.

“The New York Times confirmed last night that it had reached an agreement to take an $250m (£171m) investment from a group of companies controlled by Mexican billionaire Carlos Slim Helú to offset crippling debt.”

Beholden to Carlos Sims and a tattered reputation from their being scribes of the Bush Administration and the Pentagon, one finds little difference between the National Inquirer and the New York Times save the font size.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.