The Next Six Bailouts?

Fannie Mae? Citigroup? California? Who will get more govt. help?

ByABC News
December 31, 2009, 12:49 PM

Jan. 4, 2010 — -- Was the government's $3.8 billion infusion of cash into GMAC last week a sign of what's to come in this new year?

Some experts expect to see billions more in bailouts in 2010 -- this despite the fact that all nine original recipients of the government's Troubled Asset Relief Program (TARP) have repaid the tens of billions in loans they received in 2008 and 2009.

"I think that some of the weak links are going to need more money," said Joel L. Naroff, president and founder of Naroff Economic Advisors. "It's always impossible to say there won't be another major calamity, especially given that we're still facing massive foreclosures."

So who are the weak links? Naroff and others have a few ideas.

Late last month, the Treasury Department strengthened those suspicions when it announced that it would remove a $400 billion cap on Fannie and Freddie aid.

Thanks to high unemployment, the two companies will continue to see their portfolios weighed down by mortgage defaults, Naroff said.

"Ten percent unemployment means more foreclosures and more problems in paying back mortgages, and we're talking about kinds of mortgages that Fannie and Freddie thought were good mortgages," he said.

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As it did before, the government, he said, will step in to help stop the bleeding either by direct infusions of cash or other rescue measures.

"They're not going to let Fannie and Freddie go," he said.