BlakeP
07-12-2010, 01:18 AM
Freddie Mac and Fannie Mae, the key sources of funding that have kept lending to home buyers from completely drying up, were ordered by the government to halt trading their shares on the New York Stock Exchange to abide by NYSE delisting rules. Freddie Mac and Fannie Mae stocks, which have already lost nearly all their value, fell further when the markets got the news. Following the delisting, which was ordered for failing to meet NYSE needs for maintaining price levels, the stocks of these two companies could be traded in the over-the-counter market.Source for this article: <a href="http://personalmoneystore.com/moneyblog/2010/06/16/fannie-mae-freddie-mac-nyse/">Freddie Mac and Fannie Mae stocks delisted from NYSE, losses grow</a>
Delisting regulations of the NYSEFreddie Mac and Fannie Mae were delisted mainly because NYSE delisting rules demand that a company pull its stock if it can't make a change to keep shares from falling below the $ 1 average price level for 30 trading days. The Associated Press reports that following the NYSE delisting announcement Fannie Mae shares dropped 42 cents, which is 46 percent to 50 cents, while Freddie Mac slid 55 cents, which is 45 percent, to 67 cents. In the year of 2007, both companies shares traded at more than $ 60. As the housing crisis deepened, the stocks lost almost all of their value as they went below $ 1 by September 2008. Freddie and Fannie were both taken over by the government.Fannie Mae and Freddie Mac lossesFannie and Freddie own or guarantee almost 31 million home loans worth about $ 5.5 trillion. That?s around half of all US mortgages. CNNMoney.com explains to readers that given that September 2008 the Treasury Department has poured $ 83.6 billion into Fannie Mae and $ 61.3 billion into Freddie Mac to cover losses on the mortgage-backed securities they own or guarantee. During the housing crisis, the money has kept lending to home buyers, kept home sales and new home construction from falling further than it has, and has also kept homes from losing a lot more value than they have. But Freddie Mac/Fannie Mae losses totaled $ 93.6 billion in 2009 and one more $ 18.2 billion in the first quarter this year. The Congressional Budget Office estimates that nearly $ 400 billion in tax dollars will eventually be needed to cover Freddie Mac/Fannie Mae losses, making it probably the most expensive of all the government bailouts that they have done in previous years.Delisted Fannie Mae and Freddie Mac stock by July 8Fannie and Freddie can have delisted from the NYSE by July 8th. The Wall Street Journal reports the NYSE delisting meets the goals of government conservatorship to preserve and conserve assets. By delisting, Fannie and Freddie should both conserve $ 500,000 a year. Both companies ended up paying the maximum amount.Freddie and Fannie OTC stockAfter July 8, Fannie and Freddie stock will be traded over the counter. Brokers will negotiate directly with one one more for Fannie and Freddie stock over computer networks and by phone. OTC stocks are usually very risky because they're the stocks that aren't considered large enough or stable enough to trade on the New York Stock Exchange. It is hard to discover research on these stocks. With the delisting, David Lutz, managing director of equity trading at Stifel Nicolaus and Co. in Baltimore, told Business Week that ?We lose some transparency into what is essentially a large black hole that is eating up a large part of our bailout funds.?Additional details at these websites
Associated Pressgoogle.com/hostednews/ap/article/ALeqM5gKpMFnJoJc8QkAW3abF41E4d492QD9GCEEC00CNN Money.commoney.cnn.com/2010/06/16/news/fannie_freddie_delisting/Wall Street Journalonline.wsj.com/article/SB10001424052748704198004575310443796994402.html?m od=rss_Today's_Most_Popularbusinessweek.combusines sweek.com/news/2010-06-16/fannie-freddie-plunge-after-moving-to-delist-shares-update2-.html
Delisting regulations of the NYSEFreddie Mac and Fannie Mae were delisted mainly because NYSE delisting rules demand that a company pull its stock if it can't make a change to keep shares from falling below the $ 1 average price level for 30 trading days. The Associated Press reports that following the NYSE delisting announcement Fannie Mae shares dropped 42 cents, which is 46 percent to 50 cents, while Freddie Mac slid 55 cents, which is 45 percent, to 67 cents. In the year of 2007, both companies shares traded at more than $ 60. As the housing crisis deepened, the stocks lost almost all of their value as they went below $ 1 by September 2008. Freddie and Fannie were both taken over by the government.Fannie Mae and Freddie Mac lossesFannie and Freddie own or guarantee almost 31 million home loans worth about $ 5.5 trillion. That?s around half of all US mortgages. CNNMoney.com explains to readers that given that September 2008 the Treasury Department has poured $ 83.6 billion into Fannie Mae and $ 61.3 billion into Freddie Mac to cover losses on the mortgage-backed securities they own or guarantee. During the housing crisis, the money has kept lending to home buyers, kept home sales and new home construction from falling further than it has, and has also kept homes from losing a lot more value than they have. But Freddie Mac/Fannie Mae losses totaled $ 93.6 billion in 2009 and one more $ 18.2 billion in the first quarter this year. The Congressional Budget Office estimates that nearly $ 400 billion in tax dollars will eventually be needed to cover Freddie Mac/Fannie Mae losses, making it probably the most expensive of all the government bailouts that they have done in previous years.Delisted Fannie Mae and Freddie Mac stock by July 8Fannie and Freddie can have delisted from the NYSE by July 8th. The Wall Street Journal reports the NYSE delisting meets the goals of government conservatorship to preserve and conserve assets. By delisting, Fannie and Freddie should both conserve $ 500,000 a year. Both companies ended up paying the maximum amount.Freddie and Fannie OTC stockAfter July 8, Fannie and Freddie stock will be traded over the counter. Brokers will negotiate directly with one one more for Fannie and Freddie stock over computer networks and by phone. OTC stocks are usually very risky because they're the stocks that aren't considered large enough or stable enough to trade on the New York Stock Exchange. It is hard to discover research on these stocks. With the delisting, David Lutz, managing director of equity trading at Stifel Nicolaus and Co. in Baltimore, told Business Week that ?We lose some transparency into what is essentially a large black hole that is eating up a large part of our bailout funds.?Additional details at these websites
Associated Pressgoogle.com/hostednews/ap/article/ALeqM5gKpMFnJoJc8QkAW3abF41E4d492QD9GCEEC00CNN Money.commoney.cnn.com/2010/06/16/news/fannie_freddie_delisting/Wall Street Journalonline.wsj.com/article/SB10001424052748704198004575310443796994402.html?m od=rss_Today's_Most_Popularbusinessweek.combusines sweek.com/news/2010-06-16/fannie-freddie-plunge-after-moving-to-delist-shares-update2-.html