Do FNM And FRE Need More Capital?
Yesterday, Fannie Mae (FNM) dropped dropped $3.04, or 16.2 percent to $15.95 (See chart). Freddie Mac (FRE), fell as much as 29 percent to a 16-year low yesterday (See chart). Bloomberg reports this morning
Record delinquencies on home loans already helped cause financial companies worldwide to write down more than $400 billion on debt holdings and prompted Fannie Mae and Freddie Mac to raise almost $20 billion in new capital. They may need as much as $75 billion more as new accounting rules require them to bring off-balance sheet mortgages on to their books, according to Lehman Brothers Holdings Inc. analysts led by Bruce Harting.
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“Trying to raise $75 billion in the current environment would be very difficult,” said Mark McCarthy, a credit trader at ABN Amro Holding NV in Sydney. “I don’t think investors are going to be as forthcoming about stumping up the cash that we’ve seen in the past.”
If the two are unable to raise the required capital, ultimately, it will be the taxpayers who step and nationalize the two companies.
[…] either. What are we at, nearly a trillion $ deficiet now?Daily Dopeness - http://dopeness.org/|||Do FNM And FRE Need More Capital?Yesterday, Fannie Mae (FNM) dropped dropped $3.04, or 16.2 percent to $15.95 (See chart). Freddie […]
[…] Do FNM And FRE Need More Capital?Freddie Mac (FRE), fell as much as 29 percent to a 16-year low yesterday (See chart). Bloomberg reports this morning. Record delinquencies on home loans already helped cause financial companies worldwide to write down more than $400 … - […]