This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 5 Dumbest Things on Wall Street This Week: March 2

1. Fannie Mae Need More

Thank you Fannie Mae. You truly are the Dumbest gift that keeps on giving.

Of course, that's because you keep on getting and getting.

The humbled home-loan provider announced Wednesday that it needs to go back to the well and seek $4.6 billion more in federal aid after reporting a $2.4 billion fourth-quarter loss. As a result of its latest futility, Fannie Mae's loss for 2011 rose to $16.9 billion from $14 billion a year ago.

Yep, it sure is hard to turn a profit when you are still sitting on a ton of toxic crap in the form of pre-2009 subprime home loans. Nevertheless, Fannie's brass says the most noxious of its holdings will soon lose their stink.

"We think that we have reserved for and recognized substantially all of the credit losses associated with the legacy book," said Chief Financial Officer Susan McFarland.

For those who may have forgotten, Uncle Sam seized Fannie Mae and its sibling Freddie Mac back in September 2008, preventing the pair from insolvency. Since then, Fannie Mae has been propped up by borrowing more than $116 billion from taxpayers.

And as a result of a juvenile spat with fellow bailout baby Bank of America (BAC - Get Report), Fannie may have to borrow even more. Last week, Bank of America said it had ceased selling new mortgages to Fannie over a bad loan-buyback dispute.

This week, however, Fannie took umbrage and blamed Bank of America for the breakdown between the two former buddies. In an SEC filing, Fannie said Bank of America had "slowed the pace of its repurchases" in the fourth quarter, and that as a result of its "failure to honor its contractual obligations," its outstanding repurchase requests with Bank of America spiked.

Cutting to the chase, McFarland said that if Bank of America didn't honor Fannie's demands, "ultimately the taxpayer pays."

Really Sue? Now tell us something we don't know.

Written by Gregg Greenberg in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
5 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $12.95 0.00%
BRK.B $126.56 0.00%
CCL $43.04 0.00%
NWS $11.92 0.00%
AAPL $94.02 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs