Today (April 2nd) Treasury Secretary Timothy Geithner talked with Bloomberg's Peter Cook about the outlook for the U.S. economy and touched on Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM). Geithner said the U.S. economy is showing signs of entering a period of sustainable growth as companies begin to hire.
The burst of the housing bubble hit Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) has as their stock values are approaching penny-stock levels. The bad news seems to keep rolling in for the financial lending firms too.
Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) appear to have extended their Home Affordable Refinance Program (HARP) because of upcoming option ARMs that will either reset or recast between 2010 and 2012. The latest outlook is for $1 trillion to be reset/recast in the next few years.
Fannie Mae (NYSE:FNM) continues to burn through cash like a forest fire gone wild, to the tune of $16 billion per quarter. Shares of Fannie are down a penny today and are trading at 98 cents per share.
It seems that all the government aid provided to Fannie Mae (NYSE:FNM) still is not quite enough. The $60B provided to date is going to need another subsidy and the bailout is turning out to be quite expensive. Fannie is going to need another $15B in federal assistance.