Fannie Loses $29 Billion, Can't Afford New Pants

Fannie Mae posted a net loss of $29 billion for the third-quarter.  The loss is not quite as bad as it seems, as $21.4 billion is related to a write-down of deferred tax assets.  The company is merely admitting early that those assets will expire before it can generate profits again.  The balance of the loss came from increased loan loss reserves and other investment losses.  The losses cut Fannie's book value in half but because book value is still positive, an equity injection from the government is not necessary yet.  The good news is that net revenue jumped 53% to $4.06 billion as net interest income more than doubled and guaranty-fee income rose 20%.   The bad news is that the serious delinquency rate was 1.72% up from .64% a year ago and is estimated to head higher next year as the housing market continues to deteriorate.