The Treasury has provided loan facilities of up to $100 billion for both Fannie Mae (FNM) and Freddie Mac (FRE). Freddie Mac is preparing to ask for $35 billion from its pool. It has already drawn down almost $14 billion. It anticipates that its fourth quarter losses will require it to make the next pull.

Industry observers believe that Fannie Mae faces nearly identical problems so it will be making its own request for more funds shortly.

The news points to the fact that another big request for new capital will come from several large financial firms which are finding that 2009 maybe a worse year than 2008 was.

According to Bloomberg, “Their losses are going to be much higher than anyone anticipated,” said Paul Miller, an analyst with FBR Capital Markets in Arlington, Virginia. “The more and more that people are digging into these portfolios, they’re finding out the more and more these guys were doing subprime and Alt-A loans and classifying them as prime.”

The Alt-A trouble reaches beyond the two quasi-federal agencies to most large banks and brokerages and some insurance firms.

Taken together, Fannie Mae and Freddie Mac could easily tap the Treasury for another $75 billion before the end of this month. Fannie Mae has already said that its $100 billion facility may be inadequate to cover losses.

As publicly-held financial firms begin to post their first quarter earnings a little over two month from now, the rounds and rounds of money needed for the rescue could begin to move toward a trillion dollars. The losses are gathering speed that fast.

Douglas A. McIntyre

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