Fannie Mae and Freddie Mac and the interesting week ahead
Between these two companies they own or guarantee more than $5 Trillion worth of loans with American home owners.
Right now they are reported to be on the brink of collapse, with President Bush and Henry Paulson (US Treasury Secretary) meeting over the weekend to discuss the 2 companies fate.
The challenge for the US economy is that Fannie and Freddie guarantee some 40 per cent of all mortgages in the US, but the value of the homes used to underwrite those mortgages has in many cases fallen well below the value of the loans.
Fannie Mae has seen their share price go from just over $70 down to $10.
Freddie Mac has seen their share price from $67 to just under $8.
Add to this, Merryl Lynch is expected to announce a further write down of $5Billion and the markets should be in for an interesting week.
Right now they are reported to be on the brink of collapse, with President Bush and Henry Paulson (US Treasury Secretary) meeting over the weekend to discuss the 2 companies fate.
The challenge for the US economy is that Fannie and Freddie guarantee some 40 per cent of all mortgages in the US, but the value of the homes used to underwrite those mortgages has in many cases fallen well below the value of the loans.
Fannie Mae has seen their share price go from just over $70 down to $10.
Freddie Mac has seen their share price from $67 to just under $8.
Add to this, Merryl Lynch is expected to announce a further write down of $5Billion and the markets should be in for an interesting week.
Labels: Fannie Mae Freddie Mac
posted by SMC Trader at
7/13/2008
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