What’s going on with Fannie and Freddie? The two mortgage houses need to raise capital to avoid a government bailout - but uncertainty over whether there will be some kind of federal rescue bailout (which would dilute shareholder value) is deterring investors.
Chicken, meet egg.
Freddie’s shareholders in any case, seem to be pointing in one direction:
Right now, we can’t help but think of Freddie’s biggest shareholder: Bill Miller of Legg Mason, who has a 12 per cent stake in the troubled mortgager.
Less than forty minutes into the trading day in New York, Freddie’s shares had lost more than 20 per cent of their value, while Fannie’s stock was trading 19 per cent lower.
Related links:
Pressure on Fannie and Freddie is increased - FT
Fannie, Freddie Bailouts May Hinge on Debt Rollover - Bloomberg
Fannie and Freddie: Nobody knows anything - MarketBeat
On Fannie, on Freddie - FT Alphaville
