Fannie, Freddie Continue Slide in Pre-Market

[AP]

More bad news for housing and stock markets...

Fannie, Freddie Continue Slide in Pre-Market

By AP | 11 Jul 2008 | 08:36 AM ET

Shares of Freddie Mac dropped 35 percent and shares of Fannie Mae tumbled 27 percent in premarket trading Friday as Wall Street continued to worry about the health of the mortgage companies and the potential for a government takeover.

"We should not be in a position that only two government-sponsored lenders are willing to make mortgage loans and, without them, our economy would collapse," Piper Jaffray analyst Robert P. Napoli said in a note to clients.

Napoli lowered his target on Freddie to $9 from $28 and on Fannie to $15 from $30. He kept "Neutral" ratings on both companies, citing credit concerns.

There does not appear to be a change in fundamentals at either company, he said, just a change in sentiment.
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http://www.cnbc.com/id/25636058

[Guest]

"...
The Times said the government is considering a plan that would place the companies into conservatorship, citing people briefed about the plan.

This would mean the shares would be worth little or nothing, and the losses on home loans they own or guarantee — half of all U.S. mortgages — would be paid by taxpayers.
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http://www.usatoday.com/money/economy/housing/2008-07-10-freddie-fannie_N.htm