Fannie Mae, Freddie Mac Are Pounded

Wall Street Journal (08/19/08) P. A3; Hagerty, James R.; Saha-Bubna, Aparajita
An article in Barron's indicating the likelihood of a government bailout of Fannie Mae and Freddie Mac that would make their common shares worthless sparked a decline in their share prices on Aug. 18. At the end of trading, Fannie Mae's stock fell 22 percent to $6.15, while Freddie Mac's shares plunged 25 percent to $4.39; year over year, their stocks are down over 90 percent. Despite statements from the government-sponsored enterprises' executives that their capital levels are higher than the minimum, investors and analysts worry that even the minimum is not enough to cover further losses.