is this a good buy or good bye? These 2 companies are sending mortgages back to banks which are toxic but were guaranteed by banks when they sold them. Anyone know which banks are involved. Freddie and Fannie currently have over 10 trillion in mortgages.
At 20¢/share evaluate the investment as an option, not stock.
This one has the added twist of whether the total failure of quasi-government corporation with national and international visibility would be considered too much an embarrassment.
It has happened before. As a consultant, I was hired to work with one of the farm credit banks that was going through liquidation in the late 1980s. Farm credit banks have a much lower visibility than FNMA or Freddie.