Dealers are beginning to see the eventual nationalization of Fannie and Freddie as inevitable and are taking their stocks to the cleaners. Each are down 17-20%. Any government bailout would dilute the existing shareholders to next to nothing. A report than Freddie Mac management is meeting with Treasury officials is weighing on the shares further. With the lack of strong offsetting news flows this morning, the buck appears a bit vulnerable.
UPDATE: Just crossing the wires, the CEO of Fannie says we’ve not asked and the Treasury has not offered any aid. He further says they have more capital than ever. The stocks is off its lows but still down about 16% on the day.
