Freddie Mac forced to take losses

Obama FHFA pressures Freddie Mac to not disclose how the housing recovery plan will force Freddie Mac to incur additional losses. Nothing like the government trying to "hide" information from the public.

Freddie Mac Executive Had Taken Week Off to Deal With Stress

"Yet Kellermann has also figured in recent controversies at Freddie Mac. He and
a group of company attorneys tussled with its regulator in early March as the
firm prepared to file its quarterly earnings report with the Securities and
Exchange Commission. The group insisted that Freddie Mac inform shareholders of
the cost to the company of helping carry out the Obama administration's housing
recovery plan. The regulator urged the company not to do so, according to
several sources familiar with the matter. An FHFA official contested that
account, saying the regulator did not oppose disclosure but how the information
was portrayed in the filing.
Freddie Mac ultimately disclosed the material."

401K - tough times for those who need money now.

http://www.cbsnews.com/video/watch/?id=4955194n

These individuals were not helped in saming their money safely. Too many just put their money in and forgot about it, or trusted in the "diversify" and you will be safe. They would have been better if they had just put their money in a mattress!

Citi makes "bank" betting on its own demise.

Citi Reports $4.69 Billion in Fixed Income Trading

...something magic happened in the fixed income trading group for Citi. This is pure gold if you like arcane financial statements packed with fictional earnings. If you dig into the quarterly report, you'll learn than fixed income trading revenues were boosted by a "net $2.5 billion positive CVA on derivative positions, excluding monoclines, mainly due to the widening of Citi's CDS spread.

That takes some sorting out. A CVA is a "credit value adjustment." As you can learn here, it's the credit risk premium of a derivative contract. Once you sort it out, you learn that Citi "made" $2.5 billion on a derivatives position designed to profit when the companies own credit default swaps spreads widen.

Or, in plain English, Citi profited because it made a bet that the cost of insuring itself against a default would go up. The credit default swap market is the place where you can bet on the credit worthiness of a firm, or, essentially, the chance that a firm might default on its bonds. Citi appears to have reported a $2.5 billion trading gain in the fourth quarter precisely because the market thought the company stood a good chance of failing (hence the widening CDS spread).

Now that's some life insurance policy!!

Profit from our Sweat: exploiting the credit spread and fees

As the population works hard to stay afloat, scrimping away money into savings accounts paying just over ZERO percent, Wells Fargo comes out this morning and says they're going to make a "record" profit, claiming an expected 55 cents a share? WOW - where is this profit coming from? The cost for them to borrow money is near ZERO, this has allowed them to increase their profits per home loan from $1000 to $4000. Have credit card rates fallen? NO, I don't think so. Have auto loan rates fallen? No, I don't think so.

These banks are exploiting the population both by not passing on the full extent of saving in borrowing costs and by charging exorbitant fees on customers during times of turmoil.

Bank earnings have also been helped by the recent FASB Mark to Market changes. They will also book earnings from AIG counterparty payments that are coming from taxpayers.

Don't believe the banks are out of the water yet. This is going to be a multi year problem.