FHLMC: Freddie Mac Posts $10 Billion Loss
Freddie Mac, #2 mortgage finance company, reported a Q1 net loss of $151 million vs Q4 net loss of $2.5 billion.
Our Nattering review of Freddies financials reveals a $10 billion loss...
The actual pretax loss was $574 million with "profit" being boosted by at least $2.3 billion from changes in the way it values some assets,
FAS 157, which allows companies to estimate a value on holdings that aren't traded, reduced some credit losses by $1.3 billion.
FAS 159, lets companies pick and choose which financial assets and liabilities to measure at fair value on a recurring basis, added $1 billion to retained earnings.
Meanwhile, Credit-related expenses $1.45 billion vs Q4 $912 million vs $262 million a year ago.
"Provisions of $1.2 billion in credit losses reflects increases in delinquency rates and estimated severity of losses driven by declines in home sales and home prices."
Its nice to be preferred... FHLMC cut its common stock dividend 50%, net loss applicable to common shareholders almost doubled
$424 million vs $230 million while preferred stock dividends paid almost tripled to $272 million vs $95 million.
The Single Family guarantee segment generated a $458 million loss vs Q4 $126 million loss vs $224 million profit, a year ago.
Non mortgage related securities balloned to $48 billion vs $35 billion while cash on hand declined to $8.3 billion vs $8.5 billion.
The Nattering One muses... $8.3 billion cash to back $687 billion in their mortgage portfolio, thats a whole 1.2%, wow!
Guaranteed loans that defaulted and Freddie had to buy back tripled to $11.8 billion vs $4.1 billion a year ago, exceeding their cash on hand.
Net cash lost in operations -$6 billion vs +1.1 billion a year ago. Net cash lost in investing -13.4 billion vs -7.7 billion a year ago.
Fair value of assets dropped to negative $5.2 billion from $12.6 billion, meaning FHLMC common stockholders have negative equity.
FHLMC raised $6 billion late last year which has already been lost in Q4 operations and announced plans to raise
another $5.5 billion in capital with common and preferred stock sales. At the current burn rate, FHLMC will need $10 billion for next quarters fiasco.
The AOCI accumulated other comprehensive loss doubled to $22.3 billion vs $11.1 billion a year ago...
while the total comprehensive loss in the quarter swung to -$10.4 billion from +$1.3 billion a year ago.
FHLMC stock jumped 9% today on all this "great" news, leading the Nattering One to conclude, investors are not reading the fine print.
With increasing foreclosures and additional junk jumbo loans that will be dumped on FHLMC by the lenders, due to raised loan limits in the "economic stimulus bill"...
We foresee Freddie's death coming much sooner than anticipated.
Our Nattering review of Freddies financials reveals a $10 billion loss...
The actual pretax loss was $574 million with "profit" being boosted by at least $2.3 billion from changes in the way it values some assets,
FAS 157, which allows companies to estimate a value on holdings that aren't traded, reduced some credit losses by $1.3 billion.
FAS 159, lets companies pick and choose which financial assets and liabilities to measure at fair value on a recurring basis, added $1 billion to retained earnings.
Meanwhile, Credit-related expenses $1.45 billion vs Q4 $912 million vs $262 million a year ago.
"Provisions of $1.2 billion in credit losses reflects increases in delinquency rates and estimated severity of losses driven by declines in home sales and home prices."
Its nice to be preferred... FHLMC cut its common stock dividend 50%, net loss applicable to common shareholders almost doubled
$424 million vs $230 million while preferred stock dividends paid almost tripled to $272 million vs $95 million.
The Single Family guarantee segment generated a $458 million loss vs Q4 $126 million loss vs $224 million profit, a year ago.
Non mortgage related securities balloned to $48 billion vs $35 billion while cash on hand declined to $8.3 billion vs $8.5 billion.
The Nattering One muses... $8.3 billion cash to back $687 billion in their mortgage portfolio, thats a whole 1.2%, wow!
Guaranteed loans that defaulted and Freddie had to buy back tripled to $11.8 billion vs $4.1 billion a year ago, exceeding their cash on hand.
Net cash lost in operations -$6 billion vs +1.1 billion a year ago. Net cash lost in investing -13.4 billion vs -7.7 billion a year ago.
Fair value of assets dropped to negative $5.2 billion from $12.6 billion, meaning FHLMC common stockholders have negative equity.
FHLMC raised $6 billion late last year which has already been lost in Q4 operations and announced plans to raise
another $5.5 billion in capital with common and preferred stock sales. At the current burn rate, FHLMC will need $10 billion for next quarters fiasco.
The AOCI accumulated other comprehensive loss doubled to $22.3 billion vs $11.1 billion a year ago...
while the total comprehensive loss in the quarter swung to -$10.4 billion from +$1.3 billion a year ago.
FHLMC stock jumped 9% today on all this "great" news, leading the Nattering One to conclude, investors are not reading the fine print.
With increasing foreclosures and additional junk jumbo loans that will be dumped on FHLMC by the lenders, due to raised loan limits in the "economic stimulus bill"...
We foresee Freddie's death coming much sooner than anticipated.
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