[StBernard] Christmas Eve Taxpayer Massacre

[Westley Annis]

Dear  Friend,


	

I want to draw your attention to a recent editorial in  the Wall  Street
Journal
<http://online.wsj.com/article/SB10001424052748704152804574628350980043082.h
tml>  about the latest taxpayer bailout for Fannie Mae and Freddie  Mac.  On
December 24, 2009, in what has been called the Christmas Eve  Taxpayer
Massacre, the United States Department of the Treasury wrote a blank  check
to Fannie Mae and Freddie Mac removing the $400 billion limit on how much
money the Treasury could pour into the two failed mortgage companies. 

	

Treasury and the Federal Housing  Finance Agency (FHFA) own 79.9 percent of
each of  these Government Sponsored Enterprises.   Treasury has already
spent $110.6 billion on Fannie Mae ($59.9 billion) and  Freddie Mac ($50.7
billion) since September 2008 when the two companies were  taken into
conservatorship.  As of October 2009, Treasury and the FHFA  have purchased
$201.8 billion of mortgage backed securities through its GSE MBS  Purchase
Facility.  All told, the taxpayers  are on the hook for $312.4 billion. 

	

But for the American taxpayer,  that is not the end of the bad news. The
Federal Reserve has also spent  taxpayer money, through two new programs,
which have purchased GSE debt and  MBS.  Since their inception in November
2008, the Federal Reserve has  purchased $155.1 billion of GSE debt and
$852.2 billion of MBS (as of December  3, 2009). In sum, the Federal Reserve
has exposed the taxpayer $1.0073 trillion  of potential losses.

	

In total, US taxpayers are on the hook for more than $2 trillion of bailouts
of Fannie Mae  and Freddie Mac.  This latest action by the Treasury
Department could make  that number seem penny-ante.  But I  will continue to
fight against all taxpayer funded bailouts and work to end the  broken
philosophy of 'too big to fail' that has cost the taxpayers billions of
dollars.


Sincerely,
David Vitter
U.S.  Senator