Fannie Mae and Freddie Mac stock prices took a serious tumble today, as the market digested fears and rumors that the two mortgage giants are undercapitalized.
Financial Times reports on Fannie & Freddie's woes. Fed Chairman Ben Bernanke tried to calm everyone's nerves by stating he feels that F & F are "well capitalized in a regulatory sense" but they should raise more capital. Which is it Bennie? Are F & F fine, or broke?
Ironically it was a politician who spoke most truthfully about the 2 F's today. Republican Presidential candidate Senator John McCain spoke on the campaign trail, saying the two companies "are vital... they will not fail... we cannot allow them to fail."
- Bloomberg Explains How F & F Affect Credit Default Swaps (for financiers only!)
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