The deficit is about to vaporize

[kraft-t]

And just what will cause that. Cash infusion from (drum roll) Fannie and freddie are returning huge sums to the treasury. And it is just beginning

[bruce MN]

http://www.businessinsider.com/student-loans-net-51-billion-profit-2013-5

[Craig's Brother]

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@kraft-t wrote:

And just what will cause that. Cash infusion from (drum roll) Fannie and freddie are returning huge sums to the treasury. And it is just beginning

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Understand this: Bernanke creates money out of thin air (inflation) and uses it to buy worthless debt from these two agencies.  These two agencies then return the money to the treasury -- how is this a positive sign?  Explain yourself.

U.S. Treasury Widens Scope of Plan to Buy Bad Debt (Update2)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYXtwpG9mw9g

[kraft-t]

59.4 billion sent to the treasury by fannie mae slashing the net cost of the taxpayer bailout from 188 billion to just 55.8 billion which could drop another 30 billion if freddie mac follows suit.

Both are showing strong profits and their replacement is less critical than it has been previously.

[ollie2655]

like the irs and benghazi --looks the same to me

[Craig's Brother]

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@kraft-t wrote:

59.4 billion sent to the treasury by fannie mae

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Q & A time:

Q: Wow, how did they manage to get a 59.4 billion windfall, since the profit margin on low interest loans is so miniscule?

A: They sold off over $80 billion of their uncollectable debt and toxic assets.

Q: So who was the idiot who bought that worthless garbage?

A: The U.S. Treasury.

Yes, this transaction is marketed as money back to the taxpayers, when in reality it is an additional $20 billion loss to the taxpayer.  How clever of them, really, to market it that way.

[Red Steele]

Isn't that what GM did with their original loans (bailout)? They got a new infusion from the printing presses to pay off the original bailout and then went on the air doing commercials about how they paid back the government money ahead of schedule.

WHo needs to read 1984 when you have the double speak going on in the daily newspapers?

[Craig's Brother]

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@Red Steele wrote:

Isn't that what GM did with their original loans (bailout)?

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Precisely!

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@Red Steele wrote:

They got a new infusion from the printing presses to pay off the original bailout and then went on the air doing commercials about how they paid back the government money ahead of schedule.

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When GM repaid its TARP loans, it was nothing more than an elaborate TARP money shuffle.  Mr. Neil Barofsky, the Special Inspector General for TARP, testified before the Senate Finance Committee and during his testimony, Mr. Barofsky addressed GM's recent debt repayment activity and stated that the funds GM is using to repay its TARP debt are not coming from GM earnings.  Instead, GM seems to be using TARP funds from an escrow account at US Treasury to make the debt repayments!  The most recent quarterly report from the Office of the Special Inspector General for TARP says “The source of funds for these quarterly debt payments will be other TARP funds currently held in an escrow account.”  http://www.sigtarp.gov/Quarterly%20Reports/April2010_Quarterly_Report_to_Congress.pdf (see page 115)

Furthermore, Exhibit 99.1 of the Form 8K filed by GM with the SEC on November 16, 2009, seems to confirm that the source of funds for GM's debt repayments was a multi-billion dollar escrow account at the Treasury -- not from earnings.  In the 8K filing GM acknowledged, of the $42.6 billion in cash and marketable securities available to GM as of September, 30, 2009, $17.4 billion came from an escrow account with the Treasury.

GM merely used one source of TARP funds to repay another.  The taxpayers are still on the hook and whether TARP funds are ultimately recovered at all, depends entirely on the government's ability to sell GM stock in the future.