A Trillion Dollars for Fannie & Freddie Now Stock Gets Delisted
The two largest Government Sponsored Mortgage Associations Fannie Mae and Freddie Mac guarantee almost $6 trillion in mortgages between them. Now these two mortgage behemoths have the unenviable reputation of becoming the largest US taxpayer funded bailout in history.
What will the total cost be? Is still in question, but analysts suggest it has the potential to be up to $1 trillion, if not more. For a nation with ballooning debt this has been described as a huge problem and we should all be very concerned.
Now that Fannie’s shares have plummeted to under the dollar mark and Freddie’s are close behind, the federal watchdog has ordered they be delisted from the New York Stock Exchange. There are hopes that investors who were once dumping the stock as quickly as they could might have a change in attitude when it starts trading in the penny stock market.
Leaving the Big Board will take some of the spotlight off both the companies and in turn the Government of which they are both still an arm of. Reports will still continue to be filed with regulators, as they both still have shareholders. Market capitalization stands at around one billion dollars for each company and this will in time no doubt lessen as shares are traded and liquefied for small profits on the penny markets.
The Treasury has so far paid out around $140 billion to the two companies, with no cap or limit on further capital introductions. Ultimately many are hoping this will bring forth some kind of change in the future for both and assist in making them look a little more independent with some residual value.
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