Financials: Freddie And Fannie (NYSE: FRE FNM)
photo by m360
The market fell hard today on the news from Barron’s on Fannie Mae and Freddie Mac. It was something that I expected to happen last week, but with the price of oil dropping it held on last week. The government backed mortgage lenders have dropped to a low that neither have seen in almost 20 years. It looks like the government will still have to throw some more of our taxpaying money into the two companies to help save them from a fate like IndyMac. Their problem should be their issue not the American people. Were they handing fistfuls of money to us when they were participating shady lending practices? No, they instead gave it to their execs and the management staff for a job well done.
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The government should not be saving the butts of people who put themselves in that position. If money is what they need then take it back from the employees that help cause the problem. How many millions did they receive (I don’t remember but if you do, let me know). Barron’s stated that if the US Treasury has to bail them out, it will most likely wipe out any shareholder’s equity in those companies.
In other financial news, it is rumored that now Lehman Brothers might have weaker than expected results. It no surprise to me with what’s going on with the financials. With the shenanigans that were going on in the sector, it’s amazing that more institutions aren’t closing their doors
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Fannie Mae shares fell $1.76, or 22 percent, to $6.15, and Freddie Mac fell $1.46, or 25 percent, to $4.39, after the Barron’s report. Lehman shares fell $1.14, or 7.1 percent, to $15.03, after the Journal’s report.
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Oil prices bounced today to just over $115 per barrel, but then settled to $112.87. The tropical storm appears to be an unlikely threat to disrupt any installations in the Gulf Of Mexico.
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