Merry Xmas to Fannie Mae and Freddie Mac, who got their credit limits upped considerably once the stock markets closed for the holiday. Also, their executives, whose strict "pay for performance" packages must make some GS-13 elves green with envy this Xmas Eve.

America’s stocking got a little leaner today, as our indebtedness increased astronomically. But since it’s being sold elsewhere as a boon for "poor people" and not a banker bailout, that’s fine.

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.

The Treasury Department said it made the changes to assure financial markets it stood firmly behind both companies and to buy more time for the two government-sponsored enterprises to whittle down their mortgage-related holdings.

Even though, of course, that "assurance" to financial markets came after their sugarplum dreams began for the long weekend:

The administration waited until financial markets had closed on Christmas eve to make the announcement, thwarting chances for critics to have their voices heard.

"This news today won’t ruin anyone’s Christmas. That is, except for those who are worried about the size of the nation’s debt," said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Under a law put in place before the government seized the two mortgage agencies in September 2008, Treasury Secretary Timothy Geithner had until the end of this year to increase the limit without asking Congress for approval.

Earlier in the day (to enable parties to begin, no doubt) regulators approved a $42 million pay scheme for executives at the two secondary mortgage marketeers:

The two top executives at the companies, which have received $121 billion in federal aid since they were seized last year, could be paid up to $6 million each for their services this year. In total, the top 12 executives at the two firms are in line to receive up to $42 million in 2009 alone.

And this article ends with yet another estimate of the aid available to Fannie and Freddie:

But while many banks have returned taxpayer money to the government and resumed their traditional role as private businesses, Fannie Mae and Freddie Mac have largely become wards of the state.
ad_icon

They have each received more in direct taxpayer aid than any other firm, except for American International Group, and have no plans to repay the money. They remain controlled by the federal government and have been putting public policy goals such as reworking unaffordable mortgages ahead of making profits. And the government is now considering increasing the amount of aid available to them, which currently stands at $280 billion.

Here’s an understatement:

By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress.

While most analysts say the companies are unlikely to use the full $400 billion, Treasury officials said they decided to lift the caps to eliminate any uncertainty among investors about the government’s commitments. But the timing of the announcement on a traditionally slow news day raised eyebrows.

So what’s America’s exposure here, anyway?

$110,000,000,000 ??

Or…

$111,000,000,000 ??

Or…

$121,000,000,000 ??

Or…

$280,000,000,000 ??

Or…

$400,000,000,000 ??

Or…

$810,000,000,000 ??

Or…

"no matter how big their losses may be in the next three years" ??

Who knows? At least there won’t be any pesky Congressional approval required for whatever amount Fannie and Freddie need.

Happy holidaze from Bailout Nation!