now fannie mae and freddie mac. were taken into conservatorship and two thousand and eight when they received over one hundred seventeen billion dollars in taxpayer bailouts now there's been a lot of headlines about fannie and freddie what record profits last quarter further the mortgage giants will pay the u.s. treasury fifty nine billion dollars in dividends which will put off the debt ceiling debate in congress now some have reported that fannie and freddie's profits were driven by a recovering housing market but according to fat fannie ten q. her net income was primarily driven by record re crediting tax deferred assets to further discuss this i have with me john pryor of politico thanks for having me thanks for joining us so let's talk about this fifty nine billion dollars that fannie and freddie are going to pay to the treasury fifty billion of that is accountable due to deferred tax assets what does this mean what are they and how do they generate so much money right so back in two thousand and eight when the

regulates fannie mae and freddie mac. we will also take your call, e-mails and tweets. ♪ host: congress returns after a week-long recess to take up in number of issues. the senate foreign relations committee will hear testimony from debra jones, president obama's choice to replace chris stevens, the u.s. ambassador killed in benghazi. look for coverage on c-span.org. also in the senate, the homeland security panel will focus on the border security provision in the gang of eight's and immigration proposal. we want to get your take on usa today's front-page story from monday -- and \ / \ send us a tweet, post your comments on facebook.com, or e- mail us. here is "usa today" -- here is a quote from mark zandi -- we want to know what impact this economic growth has had on your paycheck. start dialing in now. good social media, code twitter, go to facebook. facebook. few of from we want to hear about your wages during this economic recovery, during the recession, what has happened. a little bit more from "usa today," this was

congressman mel watt as director of the federal housing finance agency this is the agency that oversees fannie mae and freddie mac. now his nomination garnered both bipartisan support and criticism tennessee senator bob corker it said in a statement i cannot be more disappointed in this nomination this gives new meaning to the adage that the foxes guarding the hen house on the other hand white house support from several republicans including senator richard burr and representative spencer baucus this is the second time obama has announced a nominee from north carolina to head the f.h. f.a. and she thousand and ten the president nominated joseph smith the north carolina commissioner of banks for the position but his confirmation failed that the republicans questions miss independence from the white house since the agency's creation in two thousand and eight and has yet to have a senate confirmed director and the post was nomination and contacts and confirmed he will take the helm from edward demarco the interim director since two thousand and nine. thousand courage to many groups to demand his

david: shareholders have they been misled, fannie and freddie shareholders?deral government bailed out citigroup and aig but preserved shareholders although they had shrunk in value eminterest doesly they had a chance to recover and they're recovering. david: right. >> now in essential comparison is they bailed out freddie and fannie and they took almost an 80% control, the government, and they left the rest of it in the hands of the common shareholders because if they didn't, they would have to assume for uncle sam all the liabilities of freddie and fannie and make the deficit even more. so, in other words, they're using and now they're abusing these common shareholders because, in 2000, almost lockstep, chairman bernanke, treasury secretary paulson, regulator lockhart, told in the summer of 2008 that the fannie and freddie were adequately capitalized. david: right. >> all these shareholders thought it was second safest investment in america beyond treasurys were surprised just a few weeks later, everything collapsed. david: surprise, surprise. they were say

dollars in extra cash which is not being lent from two thousand and seven to two thousand and eight but fannie and freddie tighten loans standards and eventually stop purchasing subprime loans altogether we all know what happened next well it's like they're getting choosy again a new rule by the federal housing finance agency which oversees the housing giants would take effect next january and it would again thailand's living standards no word yet from the want obama's new nominee to head the agency but we'll get to him later now the dow hit fifteen thousand this week it is up substantially again today but have we seen the ultimate contrarian indicator the new york fed no less released a study that concludes stocks are about as cheap of a as they've ever been as well when irving fischer said in one nine hundred twenty nine that stocks had reached a permanently high price. stay tuned as we discussed with the same ability of current market and here's what's in your prime interest. how would you like to get paid for being a facebook user well i found i found someone who thinks you should earlier

treasury bailed out fannie mae during the financial crisis. it expects to stay profitable for the foreseeable future. >>> a dire warning about the impact of the more than $1 trillion in student loan debt. the consumer financial protection bureau says much outstanding debt could have a devastating, domino affect on the economy, depleting savings, limiting spending on new cars sxuting off retirement savings indefinitely. and as diana oelich tells us, it could also have a serious impact on the housing market. >> sophia wanted to buy a home two years ago, but her student loans stood in the way. >> it definitely took a long longer than i anticipated. >> facing in $60,000 in debt from graduate and undergraduate schools, she moved back in with her parents. the only way we could save aggressively while paying down debt. >> i consider myself lucky that i had a place i could save. but people who aren't originally from the area who have to pay an extra $1,500 a month in renting, thattan rent money is not going to saving. how are they going to be able to

energies that become a sink for wealth not a creation of wealth and in the derivatives area with fannie and freddie with the moral hazard of dalzell and so forth we created an unstable system that only stabilizing capitalism but you don't blame capitalism for the fact that we've destroyed the incentive structures that with effectively socialize the risk that's not got the will to grab and socialize with georgia so none of this is. this is called comfort if you're unemployed isn't it well that's absolutely right and i was a little. strange when people talk about this idea that there's some pure capitalism because really capitalism from its inception had always been very much a state run business i mean it's basically from you know you starting from going back to the american history. of the state has always been very much involved in helping of capitalism and even before the recent bailout i mean the great. american industrial success of the computer industry would have existed had it not been for government it was a government investment in the mainframe computers that gave us the compu

fannie has written up its deferred -- freddie mac has not yet. of the equation, they will pay the government back this 188 billion most likely by the end of this year. the government, remember, is sweeping the profits now. no longer taking a 10% dividend. in this environment where you have huge deficits, the question is, all right, next year we can sweep 30 billion into government coffers. it's not the right thing to do potentially in a private enterprise system. and that's what mr. berkowitz is banking on. event weiually he believes this the right thing to do. >> moving the story forward as you usually do, thanks. >>> coming up next on "the half," we are ek comichecking t charts to look for weakness in the bull rally. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's o

kept stupid people of any institution well wall street the moral hazard problem but gone straight fannie and freddie of giving them good. wall street so figure now for those of they are doing all that a handful of people and yeah while the one percent of their people are not angels it depends on the institutional framework you created we created a system designed to fail and it failed but it was not a capital case the george i want to go here i want to give george the last word yes it was because it looked like capitalism is working just fine for one percent go ahead. yet and you know i don't know whether the deposit insurance is ready or very much to do with it i mean look at what's going on now i mean the banks are essentially getting interest free loans from the government which they then lend back to the government and then pocket the interest that they make on that so and then this money then goes into the stock market so the banks are again making money twice over and this money is not that he was in any productive way so something to do with the other with the deposit insurance it

cuando volvamos fanny gutierrez nos cuando volvamos fanny gutierrez nos cuenta que artista salvadoreÑotrayectoria de el salvador, esta en la ciudad... marito rivera promocionando lo que será el próximo álbum de su fructífera carrera, se encuentra en la ciudad capital marito rivera y nos habla de su nuevo tema "la séptima avenida" un tema nostálgico que rescata el estilo clásico de marito rivera... marito rivera estará en nuestra área hasta este próximo domingo ofreciendo tres únicas presentaciones... bueno para finalizar esta edicion de noticias..si le gusta la musica urbana, noticias washington le invita a ganarse un par de boletos vip para el concierto del maximo exponente de este genero: daddy yankee... ganar es muy facil solo debe mandar la palabra 'gasolina" a traves de un mensaje de texto al 90900, participe y disfrute del concierto del cangri con boletos vip cita de impacto. ♪ ♪ >>> gracias por acompaÑarnos. noche de jueves 23 de mayo. en menos de una hora son condenados. se realiza el primer funeral de una de las vÍctimas del tornado en oklahoma. muchas veces el tema del bullyi

energies that become a sink for wealth not a creation of wealth and in the derivatives area with fannie and freddie with the moral hazard of basel and so forth we created an unstable system that had the stabilizing capitalism but you don't blame capitalism for the fact that we've destroyed the center structures that with effectively socialize the risk that's not got the will to grab and socialize with georgia so none of this is that although this is cold comfort if you want him. lloyd isn't it well that's absolutely right and i'm also a little find it strange when people talk about this idea that there's some pure capitalism because really capitalism from its inception had always been very much a state run there's a basically from you know you starting from going back to the american history of the state has always been very much involved in helping out capitalism and even before the recent bailout i mean the great. american industrial success of the computer industry would have existed had it not been for government it was a government vessel and in the mainframe computers that gave us

there was law on the books for twenty years that so the taxpayer did not stand behind freddie and fannie that didn't quite work out that way either so let's start with two issues one is this sort of dance around taxpayer money or not and so yes title two sets a path where the rest of the industry can bail out institutions creditors now yes that's slightly better than having the taxpayer but i'm fundamentally offended by thinking that prudently run institutions should have to pay for the mistakes of imprudent institutions and of course if you look at the marketplace again we have there's no ironclad way to say fail is there or not but if you look at the funding cost it's pretty clear to me that the largest institutions have some level funding advantage over other institutions which is how you would really determine to be fields that are not i do want to mention something as well that if you look at funding cost create two thousand and eight those institutions did not have that advantage too big to fail came out of the bailouts and i think the problem with lehman was not that we let lehman

examine what you know i don't get to be ever used because we had an orderly liquidation system for fannie and freddie we didn't use it i spent tens of hours working on writing on capitol hill congressman frank worked with us on it we had a system in place in the summer of two thousand and eight that would have resolved about a dime of loss of the taxpayer did we choose to use it no you're not. we'll hear more from mark and mark or i say mark mark on the bill after the break also coming up next the arts. and i will get to the daily bill will explore the fine line between bank areas. stay with us. wealthy british style. market. has come to. find out what's really happening to the global economy with mike's concert for a no holds barred look at the global financial headlines kaiser report. to me speak your language. programs in documentaries in arabic in school here on. reporting from the we'll talk sports fifty yard p. interviews intriguing stories for you to. see in troy. visit. download the official location to your cell phone language stream quality and enjoy your favorites. if you're aw

system bound to fail right you know and we had to walk away from that of course and told you that fannie mae was very little risk too so again to me a joke and it's a good thing the bronner walks away from that and it's a good thing that they're actually counting real capital like equity before the crisis we were allowed banks were allowed to carry things like deferred tax losses that were no way capital using risk weighted assets and that you know this is where i think mixed bag because you know they set a floor and then they allow some risk weighting i think the risk where you are always inherently political it's not by accident that. large regulatory burden i actually would say to me the tradeoff should be more capital but simpler capital because if you look during the crisis and what market participants care about they did not care about what your tier one universe where the capital was they would care about how much common equity do you have that's what the market cares about that's participants care about that's what the that's what the public cares about so that's what we should b

you were talking about fannie and freddie earlier.ck at 2%, then the cyclical will solve. >> are you raising your target or protecting we're going to go down? can you tell me? >> for now we're sticking with the 10%. >> then you're bearish. jay my, i don't know what to say. breathe on your nails. what did you say finally, 16,000 or 17,000 by when? >> 16 to 17 by the end of this year. that was my target i set at the beginning of next year. and it's playing out very well. i think second half is going to be good. joe, you're making fun of ben bernanke. he can't do any good. either qe doesn't work. or when we see something that is working like housing, he's reigniting the bubble. we take both sides constantly. it's amazing. there is a whole group of people. they think that bernanke is ruling up the end of the financial world. and other people say it was so bad before. housing is coming back. consumer feels better. it's almost like congress. it's a split decision right now. only time will tell for bernanke. >> the verdict, history is going

pick is mel watt, the north carolina congressman who has been tapped to run the agency that oversees fannie and freddie. he supports -- not to get too complicated here -- principles for those struggling with their mogages, and he is resistant to this notion of overhauling fannie and freddie. he will get a lot of republican opposition and will raise a lot of questions about a week part of president obama's administration, which is housing policy and how to deal with the affordability crisis. and there error still significant for closure issues. >> we have a former banker on the panel. pressure againt to lend. if you ignore the basic requirement of lending -- people have to have the capacity to pay it back. that gets lost in the shuffle when you start to push it out like that. thing, wees the same will be back where we were before. >> i think mel watt is one of the most people members of the house, well respected, and the fact that he took this job and left speaks to what it is like to be in the minority in the house. the minority has one big responsibility in the house, which is to make a qu

i am not suggesting we should not make one on fannie and freddie. i'm simply asking as you will forward to take a look within your own shop now to make sure that we allow fannie and freddie to be credited as they pay back for that payment. if that happens, it's the right thing to do. no. two, it is reality. reality is they pay back almost $130 billion of the money or about to do it. almost $130 billion of the money we have loaned them. they should get credit for at least some of that. it's my understanding that could be done internally at treasury. i would like you to get back to us. if you can, please do it. tell us what action we need to take. similar to the fha, the fha right now is probably about to have to take a draw on treasury. even though they have $30 billion sitting in the banks and no thoughtful person thinks there will have to access taxpayer money, the law requires them to do it because it's below certain percentage of the outstanding members. that's ridiculous. the fha should be allowed to draw when they need the money but should not

"what fannie mae is about to do is to reverse the tax credits that it wiped out and remit that to the treasury. so we'll get some help with that $53 billion." though it's a long way from a surplus, this year's deficit is about a third less than it was last year at this time. it also pushes back the deadline for raising the debt ceiling into october. president obama will be in texas today where he will talk about new ways to grow the economy through advances in technology. the president will visit with students at manor new technology high school, then later deliver a speech at applied materials in austin. austin managed to avoid a major hit during the recession. the president's trip today marks the first of a series of stops highlighting new economic models. an incubator for start-ups in chicago called 1871, for the year the city began rebuilding itself after the great fire, is celebrating a year of success. the digital co-op has provided space in chicago's merchandise mart for 225 start-ups - many of them no bigger than an idea and a laptop computer helping motorists, for example, fi

the acting director of fha you may or may not have heard of, used to be fannie mac, got bailed out by the u.s. government and reconstituted into this new entity. this entity mr. dimarco runs owns one-half of all the mortgages in the united states. if you have a mortgage, there's a good chance the entity dimarco runs owns your mortgage. as the owner of half the mortgages in this country, he could be the one to implement the kind of policy today the cfo said was a good idea. for more than a year, he has refused and argued he is mandated by law to preserve and converse fannie mae's assets rather than look out for the entire housing market. despite my entity exists only because of the expenditure dollar, i'm not looking out for u.s. citizens but balancing my books. here's the good news, dimarco is on his way out and president obama wants to replace him with this man, congressman watt, on the banking committee and distinguished himself on borrowers and predatory lending, good news where the american homeowner is being screwed by the banks and powers in washington as well. we're reminded wh

i asked the ceo of fannie mae this morning if this new profitability might affect the future of fanniee said that there is a risk that policymakers will look at this profitability and decide that they don't need to do any reform of the housing finance system and he said that "would be a mistake." all the housing cronies i follow on twitter are ablaze this morning talking about this new profitability at fannie mae and freddie mac and what that's going to mean for the two's future going forward and also what the government is going do with this billions of dollars that it is getting from the two mortgage giants. >> they've covered this so well. people at home are saying, wait a second, fannie mae -- this is really incredible. she's spot-on. >> it is amazing to see the number and hear them say we don't know if we're going to exist after conservative toreship. >> these guys used to be very profitable. this was a great stock for a long time. the more housing comes back, the more they'll pay to treasury. >> many thanks to diana. >>> david faber is live in sin city at the sky bridge alternati

talking about john paulson who shorted subprime and made of millions or as a hedge fund now he's long fannie and freddie along with some other hedge funds who bought preferred shares to match uncle sam's investment senator bob corker characterized the stock as a lottery ticket but that hasn't stopped a run up in price of over one hundred seventy percent in the last few months just last week of fannie mae and now as they will repay the treasury fifty nine billion dollars for bailout money it took during the crisis but this is a one off event that's only possible because of an intel to change and deferred tax asset good luck mr paulson. and the bloomberg a to stand over ten ten years as financial heavyweights engage in dialogue with the embroiled market data provider clients including of china's central bank the federal reserve and the f.d.a. if you have inquired about data confidentiality issues in j.p. morgan short of problems itself is having serious dialogues with bloomberg and is considering its options and chief executive of bloomberg lp have personally reached out to three hundred clien

stop a run up in price of over a hundred seventy percent in the last two months just last week of fannie mae announced they will repay the treasury. fifty nine billion dollars for bailout money it took during the crisis but this is a one off event that's only possible because of an anti-doping change and deferred tax asset good luck mr paulson. and the bloomberg a to stand ten ten years as financial heavyweights engage in dialogue with the embroiled market data provider clients a good ng a china central bank the federal reserve and the f.d.a. if you have inquired about data confidentiality issues and j.p. morgan short of problems itself is having serious dialogues with bloomberg and is considering its options the sheep executive of bloomberg lp has personally reached out to three hundred clients and apologized and lastly age as europe's a large as banged has so far gotten off with a wrist slap for money laundering suits and the u.s. and europe but it now faces a new money during charges and argentina is a country that hordes one in fifteen u.s. bills according to bloomberg. view sees tro

how would you in a fannie and freddie and what do you think should happen to those two?they should now be abolished. >> some of us did try to stop the sub prime lending. people forget that. the bill with another democrat to start sub prime lending and it was stopped by tom delay who said it was a violation of free market principle. when i first became the chairman, i worked with hank paulson and we put the rules into effect that stopped the bad thing, gave them the power to put it in conservatorship. i think that's pretty good. what i think should happen now is they should be abolished. >> almost everybody who is in the housing market. >> and the way that people are moving, i believe, some republicans and administration is to have available a guarantee that can be purchased by lenders who want to have a 30 year fixed rate mortgage priced to pay for itself. and i think that's the likeliness. they will be replaced by a mechanism. that will guard them against the interest rates. >> before we let you go, a quick question on main street versus wall street. we see the dow jone

talking about john paulson who shorted subprime and made of billions or as a hedge fund now he's long fannie and freddie along with some other hedge funds who bought preferred shares to match uncle sam's investment senator bob corker characterized the stock as a lottery ticket but that hasn't stopped a run up in price of over one hundred seventy percent in the last two months just last week of fannie mae and now they will repay the treasury fifty nine billion dollars for bailout money it took during the crisis but this is a one off event that's only possible because of an entire change and deferred tax asset good luck mr paulson. and the bloomberg gate scandal ten ten years as financial heavyweights engage in dialogue with the embroiled market data provider clients including of china's central bank the federal reserve and the f.d.a. have inquired about data confidentiality issues and j.p. morgan short of problems itself is having serious dialogues with bloomberg and is considering its options and she executive of bloomberg lp has personally reached out to three hundred clients and apologized

according to the bipartisan policy center yesterday one of these extraordinary measures comes from fannie mae who will be paying the treasury fifty nine point four billion dollars after reporting record profits last quarter so essentially one of the driving factors bailing us out of another debt ceiling crisis it's only temporary is the housing market due to rising prices and cheap money in part thanks to fed manipulation now i have with me abby martin the host of breaking the set to weigh in on this everything for joining the q this does is amazing. well we're certainly in extraordinary times in budget history calling for extraordinary measures are.

talking about john paulson who shorted subprime and made a millions or as a hedge fund now he's long fannie and freddie along with some other hedge funds who bought preferred shares to match uncle sam's investment senator bob corker characterized the stock as a lottery ticket but that hasn't stopped a run up in price of over one hundred seventy percent in the last two months just last week of fannie mae announced it will bring.

talking about john paulson who shorted subprime and made a million or as a hedge fund now he's long fannie and freddie along with some other hedge funds who bought preferred shares to match uncle sam's investment senator bob corker characterized the stock as a lottery ticket but that hasn't stopped a run up in price of over one hundred seventy percent in the last few months just last week of fannie mae announced it will repay the treasury fifty nine billion dollars for bailout money it took during the crisis but this is a one off event that's only possible because of an intel to change and deferred tax asset good luck mr paulson. and the bloomberg a to to stamboul.