Indymac shares, from $50 to 28 cents; why would Freddie/Fannie be different?
- Thread starter crgarcia
- Start date
freddie peddles higher quality paper...prime as opposed to alt-a with indymac
Does freddie even have depositors? They issue loans backed by prime mortgages as their main revenue generator AFAIK. The risk I see with freddie is that they won't be able to roll their loans and get squeezed for cash.
Does freddie even have depositors? They issue loans backed by prime mortgages as their main revenue generator AFAIK. The risk I see with freddie is that they won't be able to roll their loans and get squeezed for cash.
Apples and oranges. IndyMac was a bank that took deposits, paid interests on those deposits and made loans, a lot of them bad apparently. Indymac depositors were largely protected by FDIC. Its shareholders are not. Fannie and Freddie do not accept deposits. They make mortgage loans and guarantee mortgage loans. IndyMac's demise was hastened by a run on the bank by depositors. That scenario is not possible with Fannie and Freddie. What is possible is that buyers of Fannie and Freddie's mortgage back securities lose confidence in either these entities being able to remain solvent, or that the US Gov't. would ultimately cough up enough cash to keep or make them solvent. How FRE and FNM shareholders would make out if these entities go on life support remains to be seen.
not 28 cents,
try ten cents,
and less than that when the stock trades again on Tuesday
IMB gap up? IMB is completely finished, the FDIC has moved in, it's completely gone.Quote from matador04:
Probably big gap up tomorrow. Paulson just saved FRN/FNM shareholders (and short put traders)
FNM/FRE are saved.