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U.S. pledge fails to lift cloud over Fannie, Freddie

Posted By admin On July 14, 2008 @ 2:21 pm In Featured Stories | Comments Disabled

Lynn Adler
Reuters [1]
Monday, July 14, 2008

Buyers showed no hesitation in bidding on Freddie Mac’s $3 billion debt sale on Monday, just hours after the U.S. government pledged support for the nation’s top mortgage finance agencies, but the steps failed to stem growing alarm on Wall Street.

Global stock markets had rallied after the Treasury Department and Federal Reserve stepped in on Sunday with offers of richer credit lines, equity purchases and direct access to central bank coffers should Freddie and its sister agency Fannie Mae run into deeper financial trouble.

However, stocks quickly shed initial gains as investors feared the steps will do little stem the losses spreading through the financial sector in the wake of a deflating housing market and stalling economy.

Friday’s failure of mortgage lender IndyMac Bancorp Inc, the third-largest bank collapse in U.S. history, was a pointed and painful reminder of the financial strains. Shares in a host of banks, including National City and Washington Mutual, fell sharply.

“This incident (with Fannie and Freddie) is not the last one,” billionaire investor George Soros told Reuters in a telephone interview, adding that the year-long global financial market turmoil represented “the most serious financial crisis of our lifetime.”

Full article here [1]

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URL to article: http://www.prisonplanet.com/us-pledge-fails-to-lift-cloud-over-fannie-freddie.html

URLs in this post:

[1] Reuters: http://www.reuters.com/article/newsOne/idUSN1332789320080714

[2] Hank Paulson Wants To Fix Fannie And Freddie By… Recreating Fannie And Freddie: http://www.prisonplanet.com/50651.html

[3] Regulator approves millions for Fannie, Freddie execs: http://www.prisonplanet.com/regulator-approves-millions-for-fannie-freddie-execs-2.html

[4] Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case: http://www.prisonplanet.com/fannie-freddie-fix-at-160-billion-with-1-trillion-worst-case.html

[5] Fannie, Freddie Slump on Concern Treasury Bailout Is Inevitable: http://www.prisonplanet.com/fannie-freddie-slump-on-concern-treasury-bailout-is-inevitable.html

[6] Fannie Mae, Freddie Mac bailouts could hit $363 billion, report says: http://www.prisonplanet.com/fannie-mae-freddie-mac-bailouts-could-hit-363-billion-report-says.html

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