Yesterday, the strangely named Freddie Mac and Fannie Mae, took a drubbing. Although they somewhat recovered, they still appear anemic.
Freddie Mac, for example, at one point was trading at US$4.90 - a drop of over two dollars from the previous close.
President Bush categorically stated that neither firm would be nationalized, and that they would remain shareholder companies.
Okay, that's fine, but if a stock is considered risky, and it's decline in a 3 hour period is equal to half it's trading price, how likely is it that it could get beaten down to zero?
More importantly, when the value of debt on the books of these two companies exceeds the entire combined GDP's of Canada, Britain, and Australia, and if their shares are zero, AND the US Government has no intention of taking them over, what happens next?
Sh*t, I'm tempted to waste $100 on Freddie and Fannie stock just to avoid the answer...
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