As far as setting cash aside, much the loss this quarter (except for the large loss from recognizing that they will not get to use their tax deferments) comes from setting more cash aside as their loss expectations increase. Loan loss reserves do not count as capital, as far as accounting is concerned it is as good as spent. The two GSEs have quite a bit of reserves socked away, and the accounting gives their estimate of where they will stand after all their assets and liabilities run their course (with the exception of where accounting requires that they give the value as if they had to sell today, ie Mark-to-Market)

What you would see, is the con artists at the top of the pyramid with all the money and the rubes at the bottom of the spreading base. I think we could also add in a little color, like insider pirates flying green and black flags, on the top, with the crying rube lemmings below sinking deeper in the red.

http://econompicdata.blogspot.com/2008/11/how-much-of-bailout-money-will-make-it.html

First things first
Of these, the first is more important. The current crisis – or more accurately the dramatically
altered dynamics that took hold after the inflexion point in mid September
– has been addressed with speed and pragmatism.
But the crisis is not over. An extended credit lockup (with its potential for extraordinary
damage) has probably been avoided. TED and related spreads seem to have
moderated. Commercial paper is being rolled over, though not through the conventional
channels (which are still largely closed). The payments system is functioning;
public funds are flowing into the financial system helping to recapitalise banks.
But there is a good deal more to do before we are out of the woods.
• Mortgages need to be removed from damaged balance sheets, terms reset and
foreclosures limited.
• Collateralised and structured assets, not trading and with uncertain values,
similarly need to be evaluated, purchased, and dismantled.
While the original conception of TARP did not act quickly enough to recapitalise the
system, it remains politically and economically important.
• Homeowners need help.
Help for homeowners was part of the bargain; implemented properly it will help prevent
a dramatic downward overshoot in housing prices. And it will begin the process
of removing the transparency fog and therefore uncertainty about value that surrounds
those portions of balance sheets with complex securitised and structured
assets, one of the reasons why private and SWF capital, having been burned once, is still mostly on the side lines.
11

Assets? Don’t they have a few trillion in assets? Surely they don’t burn through that amount in 60 days?

Did you mean net worth, shareholder equity or some such?