Fannie and Freddie are gonna need a bail out?

Fannie Mae and Freddie Mac, the two biggest providers of financing for US home loans, tumbled to the lowest in 17 years in New York trading after a former Federal Reserve president said the companies may need a government bailout.

Fannie Mae and Freddie Mac tumble on insolvency fears

Fannie Mae tumbled as much as 20pc and Freddie Mac slumped as much as 29pc after UBS analysts said the company creates "challenges" for the company's plans to raise $5.5bn.

"Chances are increasing that the US will bail out Fannie Mae and Freddie Mac because they don't have enough capital to weather the worst housing slump since the Great Depression", former St. Louis Federal Reserve President William Poole said.

Freddie Mac owed $5.2bn more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he added.

While, the fair value of Fannie Mae's assets fell 66pc to $12.2bn and may be negative next quarter.

"Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," Mr Poole, 71, who left the Fed in March, said.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/10/bcnus1...

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All this bailout talk will STOP come Jan 21st 2009. The USA got very unlucky when serious indications were admitted about a year before the election.

Got to love Republican style capitalism where they privative profits and socialize loss.

Aww..Sensor, you beat me to it. I was wondering where all of the talk of "Socialism" was? I guess the wingnuts haven't received their talking points from Rush yet....

Pink Slip

Here's good ol' McCain proving he's no fiscal conservative:

"Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail. They are vital to Americans’ ability to own their own homes. And we will do what’s necessary to make sure that they continue that function."

I'm ready to hear the outcry from his fiscally-conservative, Republican base. Oh! Oh! That's right, THERE IS NO SUCH THING. His "base" only cares about keepin' those fags from marrying, and bomb-bomb-bomb-Iran.

Somebody's got to tell McCain that people at risk for foreclosure are NOT homeOWNers. People who OWN something are NOT making payments on it. So the addled fool is really talking about homeDEBTors, isn't he?

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