Everyone who has seen the movie Rounders remembers the line from Teddy KGB when he tells Mike McD, "It's a f*cking joke anyway - after all, I am paying you with your money."
I used that quote previously on this blog when talking about AIG, but today's Freddie Mac announcement takes the cake, removes all ambiguity, and, well, has to make you laugh:
"The company had a net worth deficit of $58 million at September 30, 2010, compared to a net worth deficit of $1.7 billion at June 30, 2010. The deficit in net worth for the third quarter resulted from several contributing factors, including a dividend payment of $1.6 billion to Treasury, which exceeded total comprehensive income of $1.4 billion. To eliminate the third quarter net worth deficit, the Federal Housing Finance Agency (FHFA), as Conservator, will submit a request on the company's behalf to Treasury for a draw of $100 million under the Senior Preferred Stock Purchase Agreement"
So Freddie Mac has negative net worth because they had to pay a dividend to Treasury. Solution? Borrow money from Treasury! Voila! FIXED IT! (/sarcasm)
This takes "I'm paying you with your money" to a whole new level. Life imitates art. Again.
-KD
3 comments:
That is amazing! Someone must be angling for the 2011 Ignoble Prize.
Kind of like how the government's revenue has shown marvelous improvement because of the coupon interest the Federal Reserve is making on its Treasury holdings. . .
Damn, what a great gig! I have been giving "dividends" to the RedRock casino for years now, and all I get paid back in are beers.
Great post Kid!
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