BREAKING news...CLICK TO READ.....
The news, first reported on The Wall Street Journal's Web site, came after stock markets closed. In after-hours trading Fannie Mae's shares plunged $1.70, or 24 percent, to $5.34. Freddie Mac's shares fell 95 cents, or almost 19 percent, to $4.15.
Of course, the news was leaked after the markets closed. What a mess! Shareholders, whether common or preferred will be wiped out. Fannie & Freddie controlled 5 trillion dollars of loans - most of them called LIAR LOANS - no doc - low doc loans - foreclosures are rising as is unemployment. Looks like commercial real estate will be the next sector to take a haircut in valuations.
The Fed makes these announcements after the markets are closed - on a weekend. Essentially the government is monetizing all bad debt...on with the printing presses! Ramifications???
Post COMMENTS here...My call is that lending will tighten even further.
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