OUCH!

This has to be one of the ugliest things I’ve seen in quite some time. Fannie is down to 13.20 today and Freddie has fallen all the way down to 8.00. It’s just nasty. If these two agencies get into too much more trouble, it is going to be a major problem for our banking system.

Personally, I think that giving these agencies more power is just a silly idea. We are simply putting the burden on my children. Fannie and Freddie have shown that they are not the most reliable stewards of money, and giving them more power and cash. This drop is just ugly, they are getting near to a bottom (I mean, Freddie can only go down 8 more points!), but I would not touch these with a ten foot pole.

If the government bails them out, it will be great for Fannie and Freddie, but back for the taxpayers. We need to let the private capital markets work this process out. This is just silly.

Categories: Investing