When Fannie Mae and Freddie Mac went bust, a number of major players were stung as the value of Fannie and Freddie preferred shares plummeted. Principal amongst these players was Gateway Bank, which had a huge percentage of bank capital tied up in the preferreds.
Now Gateway has arranged a takeover by a rival smaller [...]

In case you missed it, the financial system in the U.S. is near collapse. This weekend was unbelievable. Lehman Brothers filed for bankruptcy. The world’s largest insurer AIG is looking for the Fed to help it avoid collapse and Merrill Lynch was forced to close a deal with Bank of America to save [...]

Update 06 Mar 2009: I am re-posting this because I am considering the view that Fannie and Freddie will be used to buy up mortgages, effectively nationalizing the U.S. Mortgage problem (see my last paragraphs). I had seen this as the likely result when the GSE were first put into conservatorship, but the Bush Administration was opposed to such an outcome. This is ever more likely now that Obama is in office.

The post-mortems on Fannie and Freddie are flying in. It seems like it is almost non-stop Fannie and Freddie. Let me add to those voices with a bit of a twist: the bailout of Fannie and Freddie was as much a political move as it was a move to save financial markets.While [...]

The finance and investing website Money Morning has a very provocative piece om Jim Rogers today. Rogers, who has been railing against the bailout of Fannie and Freddie for some time, thinks the Treasury and Federal Reserve will fail in their attempts to reflate the U.S. economy. He goes into great detail in [...]

Today, David Wighton over at the Times Online referenced U.S. Treasury Secretary Hank Paulson’s quip that the U.S. Government had a bazooka ready to us in the case of the Frannie and Freddie Nightmare on Wall Street in saying:
Helping to stabilise the U.S. housing market should bring some benefit to British counterparts. It will also [...]

Apparently, the answer is yes.
Thirteen “major” dealers of credit-default swaps agreed “unanimously” that the rescue constitutes a credit event triggering payment or delivery of the companies’ bonds, the International Swaps and Derivatives Association said in a memo obtained by Bloomberg News today. Market makers for the privately traded contracts will discuss how to settle them [...]

If you are looking for the fallout from the Fannie and Freddie Nightmare on Wall Street, look no further than Gateway Financial and Midwest Banc. These two regional banks have nearly one-third of their tangible net worth tied up in GSE preferred stock, which is now worthless.On August 29th, Business Week reported that these [...]

The U.S. government has finally stepped in to stop the bleeding. Fannie Mae and Freddie Mac, the two giant government sponsored enterprises have been taken into conservatorship and are now government property. As I consider this move a bankruptcy, I will add these two to my list of Global Banking Bankruptcies. These [...]

A prediction I first broached here in May in my post Question: How is Fannie Mae a AAA company? is finally coming to pass: Freddie Mac and Fannie Mae are getting nationalized.
UPDATE: The U.S. Government takeover is now a done deal. See my post on the details of the merger with a [...]