A Perfect Storm Slams Freddie Mac & Fannie Mae

Are Freddie Mac & Fannie Mae heading toward a government conservatorship? This New York Time's article discusses the extreme market pressures bearing down on Freddie Mac & Fannie Mae.

In a related article, market participants offer some comments that point to a very serious and potentially very expensive (for the tax payer) problem to fix. Some key quotes:

“There is a real panic about these companies on Wall Street right now, and sometimes a blaze like that grows almost without reason,” said Tom Lawler, an economist" - “There wasn’t really any new news to set off this crisis. The stocks just started falling, and didn’t stop.

“If people lose faith in Fannie and Freddie, then the whole system freezes up, and nobody can buy a house, and the entire housing market can crash,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Va" - “There’s a fine line between having faith and losing it, and sometimes it’s unclear when it has disappeared. But when investors cross that line, bad things happen very quickly.

“This is the last thing we need right now,” said Brett Barry, an agent at Realty Executives in Phoenix. “The market is like an elevator with the cable cut lose. It is accelerating downward.”

Infographics on Freddie Mac & Fannie Mae from the New York Times:

Posted at July 11, 2008 06:35 PM

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Are Freddie Mac & Fannie Mae heading toward a government conservatorship? This New York Time's article discusses the extreme market pressures bearing down on Freddie Mac & Fannie Mae. In a related article, market participants offer some comments that point to a very serious and potentially very expensive (for the tax payer) problem to fix. Some key quotes: “There is a real panic about these companies on Wall Street right now, and sometimes a blaze like that grows almost without reason,” said Tom Lawler, an economist" - “There wasn’t really any new news to set off this crisis. The stocks just started falling, and didn’t stop. “If people lose faith in Fannie and Freddie, then the whole system freezes up, and nobody can buy a house, and the entire housing market can crash,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Va" - “There’s a fine line between having faith and losing it, and sometimes it’s unclear when it has disappeared. But when investors cross that line, bad things happen very quickly. “This is the last thing we need right now,” said Brett Barry, an agent at Realty Executives in Phoenix. “The market is like an elevator with the cable cut lose. It is accelerating downward.” Infographics on Freddie Mac & Fannie Mae from the New York Times: