Freddie Mac asks for $10.6 billion

What happens when government-sponsored enterprises (GSE's) are given access to unlimited bailout funds through 2012?  They take the money.  From The Wall Street Journal:

Freddie Mac says it will need an injection of $10.6 billion from the U.S. Treasury after posting a $6.7 billion loss for the first quarter, as the weak housing market continued to burn a hole in the company's balance sheet.

Freddie, which had a loss of $9.8 billion a year earlier, said that the brunt of its losses resulted from accounting changes that took effect Jan. 1 and brought some $1.5 trillion in mortgage guarantees onto its balance sheet.

Freddie Mac and its larger sibling, Fannie Mae, were taken over the by the government in 2008 through a legal process known as conservatorship. The government has said it would put unlimited amounts of capital into the companies to keep them afloat over the next three years. Freddie's request for more aid, its first in three quarters, will bring the government's tab for both companies to $136.2 billion.

Freddie has lost $82 billion over 10 of the past 11 quarters, or nearly twice the amount it earned in the previous 30 years. (emphasis mine) [snip]

The earnings report came as Republicans introduced a measure that would end within two years the government conservatorship of the companies, placing them into receivership, a form of bankruptcy restructuring, if they weren't viable. While the amendment would appear to face an uphill battle, it could force Democrats to take a politically dicey vote.

Introduced by Sen. John McCain (R., Ariz.) as an amendment to the financial-regulatory bill before the Senate, the measure would sharply reduce the companies' mortgage holdings over the next three years. It would also repeal expanded limits that have allowed the firms to buy larger loans in high-cost markets and would set new down-payment standards for loans the companies can buy.

Republicans have increasingly argued that the financial-regulatory bill isn't addressing one of the key contributors to the housing collapse, but the Obama administration says it would rather deal separately with Fannie and Freddie next year once housing markets are more stable.

I'm hearing (little orphan) Annie singing "The Sun Will Come Out Tomorrow."  I hope it does.

Meanwhile, Senate Republicans should hold firm against the Democrats' financial reform bill that does little to stabilize the financial markets, nothing to prevent future bailouts, and nothing to reign in the hemorrhagic losses of Freddie Mac and Fannie Mae.

Senator Coburn blocks extension of unemployment benefits

The Senate adjourned Thursday for a spring recess that will last until April 12 without extending unemployment benefits that expire at the end of the month for some Americans.  The reason:  Senator Tom Coburn blocked the measure from coming to the floor for a vote.  Jon Ward at The Daily Caller explains:

Coburn, an Oklahoma Republican, blocked the Democrats’ bill from coming to the floor for a vote, after Democrats rejected a Republican effort to pay for the $10 billion in benefits with unspent money from the $787 billion stimulus bill.

Coburn said in a nearly hour-long speech on the Senate floor Thursday afternoon that to bypass the pay-as-you-go law signed by President Obama in February – which Democrats wanted to do for the fourth time since then by declaring the expenditure an emergency – would be “immoral.”

Senate Republicans said that Senate Majority Leader Harry Reid, Nevada Democrat, had approached House Speaker Nancy Pelosi, California Democrat, with a bipartisan proposal to extend jobless benefits for two weeks and pay for it as Coburn wanted, but that she rejected it. But Pelosi and Reid spokespersons both said that was untrue.

“Senator Coburn has decided to stand in the way of Americans receiving needed benefits. The House passed unanimously a 30-day extension and any claim that there was an agreement reached in the Senate on a shorter bill is noting more than spin by Republicans,” said Pelosi spokesman Nadeam Elshami, who accused Coburn of “grandstanding.”

Coburn said he agreed that as the nation deals with 9.7 percent unemployment “we ought to be helping those people,” but said that giving aid to the jobless was “less good” than starting to make tough choices about paying for government expenditures, which he said is “absolutely necessary.”

If the government's Recovery.gov Track the Money website is to be trusted (humor me), $485.8 billion of the $787 billion stimulus funds have not been spent as of March 12, and yet our elected officials would not approve spending $10 billion of it for the extension of unemployment.   Coburn and Kentucky Senator Jim Bunning understand that our government cannot keep spending money it does not have.

What possible logic can there be to continue borrowing unrecoverable funds in a tepid treasuries market, while hoarding stimulus funds that have already been allocated?  Well I think I can venture a guess.  That $485.8 billion will be divvied up among the states and congressional districts of endangered Democrats just in time for the November election.  Let's just call it the Pelosi/Reid public war chest.

When you hear the mainstream media castigate Coburn in the coming weeks (just as they did Jim Bunning last month when he tried to do the same thing), don't fall for it.  These Republicans are willing to stand up for the truth and make the difficult and moral decisions that our nation's precarious fiscal footing demands.

Stimulus bill creates 6000 wind power jobs....overseas!

ABC News is reporting that 80% of stimulus money spent on wind power went to foreign countries:

Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University's School of Communication in Washington, D.C.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

So Where Are the Jobs?

"Most of the jobs are going overseas," said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. "According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S."

To be fair and balanced, some wind turbines were actually refurbished in California for use in Minnesota.  They just don't work:

Like a lot of California transplants, 11 newcomers to Minnesota are having a hard time adjusting to our winters.

They are wind turbines, erected last fall by 11 metro and outstate cities. The green-energy machines were expected to be spinning before Christmas, but so far their blades have been largely motionless, apparently paralyzed by frigid weather.

The turbines sit idly in Anoka, North St. Paul, Chaska, Shakopee, Buffalo and six other cities, all members of the Minnesota Municipal Power Agency (MMPA). The refurbished, 115-foot towers had operated on a California wind farm, where they didn't have to worry about cold hydraulic fluid turning to gel and oil lubricants getting too sluggish.

Avant Energy of Minneapolis, which operates the turbines for MMPA, says it is bringing in a company that will get the windmills running within two months.

Within two months?  Won't it be spring by then?