madasiwannabe

Is the Government's Fannie/Freddie Conservatorship Failing?

ClairePaula, there's a lot of questions still left unanswered and too many contradicting comments from Paulson and Lockhart, so until their's a solid direction and consistancy in communications with those involved, the GSE's will continue to move up and down.

FIrst they say they have enough capital to continue to operate for 6 quarters, then they take them over and wipe out 36 Billion dollars worth of shareholder value. Then they bash them for becoming too big, and turn around and order them to become bigger... They say they are in financial trouble and tell the world their job is to protect their assets and return them to profitibility as possible, then they say they are going to use them to buy up troubled assets from the finanacials, which would destroy what's left of shareholder value. If they are in trouble why hasn't the treasury used any of the "Backstop" money?

They are suppose to release Q3's on the 17th, but once again, Lockhart commented several weeks ago they didn't have to report while in conservatorship. I think investors are scared to put any money into either Fannie or Freddie because of the obvious "new management" issues. Until these guys go away, I wouldn't go anywhere near either Fannie or Freddie.