The Christmas Eve dump

(a seasonal varietal to our Friday evening dump series which is intended to shine some light upon unsavory and/or unpopular news coming out of Capitol Hill or the White House right before the weekend)

The Obama administration pledged on Thursday to back beleaguered mortgage finance giants Fannie Mae and Freddie Mac no matter how big their losses may be in the next three years.

It also jettisoned a demand that the two companies cut the size of their mortgage-related investment portfolios next year, allowing them to provide even more support in the near term for a housing market recovering from its worst slump in decades.

Analysts don’t expect Freddie to tap the full $200 bil but Fannie, because of horrendously poor underwriting standards, left it with losses that many think will grow past $200 billion.

By law, Geithner had until the end of this year to increase the limit without asking Congress for approval. And to be on the safe side, he did it on Christmas Eve.

Just how toxic the assets that Fannie holds may be difficult to figure out since Fannie effectively wacked their own Inspector General. And to keep form, don’t expect the Treasury Department run by that miserable hack to look into it. This also begs the question, with no IG oversight and no effective spending limit, what’s to keep Fannie from continuing to encourage and back subprime lending?

And this brings us to our first real bipartisan pushback against the Obama corporatism/fascism economic model as the liberal Fire Dog Lake’s Jane Hamsher and the small government, low tax Americans for Tax Reform’s Grover Norquist have teamed up to ask the Justice Department (sigh) to look into White House Chief of Staff, Rahm Emanuel’s dealings with Freddie Mac while he was on the board of directors (2000-2001) and during his time thus far in the White House where Hamsher and Norquist believe Emanuel has been directing stonewalling efforts to obtain information on the bankrupt Freddie Mac.

We don't expect much movement on this but we'll keep you posted.