Fannie Mae and Freddie Mac: Returning to Profitability

Fannie Mae and Freddie Mac: Returning to Profitability Updated: 3/12/2014

Fannie Mae and Freddie Mac have returned to profitability. In 2008, the two combined mortgage lenders received $187B in TARP funds. What is not as well known, by the end of March 2014, they will have paid around $200B in dividends back to the US Treasury, far exceeding the amount the government supplied the agencies to stay afloat. US Equity markets have been choppy this week and are currently down around 1%. “Fannie Mae and Freddie Mac’s rise to profitability and subsequent payment of dividends in excess of $200B is partially due to home prices coming back into favor, along with a 2012 bailout amendment by the US government. The amendment requires both agencies pay a majority of their profits as dividends to the US treasury,” said David Krein, Head of Research, NASDAQ OMX Global Indexes.


INDEX MOVES THIS WEEK

  • NASDAQ BIOTECHNOLOGY INDEX (NBI) was flat this week with a 0.47% return since Friday’s close. Year-to-date performance for the index is up 15%.
  • PHLX GOLD/SILVER SECTOR (XAU) was up 0.95% as of noon on Wednesday from the most recent Friday close. The price of gold is currently $1365 per ounce, up over $100 from the end of January.
  • NASDAQ INTERNET (QNET) was down this week with a return of -2.06%. Some core holdings include Facebook, eBay, Google, Priceline and Amazon.

INDEX TO WATCH

  • With the recent political issues in Russia, look for activity in their markets by tracking the NASDAQ Russia Index (NQRU), which is down 29% year-over-year, after dropping 15% in the last two weeks.

 

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