Fannie, Freddie and Lehman Still Shake Us

Now that the Fed and Treasury are on the case, it is worth considering that the Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take) preferred non-bailout and the Lehman disaster have not stopped rippling through the system. So much of the TARP program is going to be used to stem the losses that banks and insurers took on the FNM/FRE preferreds and on Lehman. So much.

That's what's going on with Hartford Financial (HIG - commentary - Cramer's Take), one of those companies that had disclosed that it would be hit from these. HIG just reported a monster loss, putting these annuity companies right back on the hot seat. They took an almost billion-dollar accounting charge on the annuities, which would seem to imply that they need more money to make good on their pension obligations.

If I were a bear, I would take this thing down in an uncoordinated bear raid with others to where it needs to be nationalized because it can't raise cash. That's a worthy goal, but I am sure the newfound avoid-another-Lehman bunch at the Fed/Treasury would pull an AIG and get it right again. Not good for the common, though.

Like, real bad.

Random musings: Cigna's (CI - commentary - Cramer's Take) situation sounds a little better than HIG's, but this death benefit variable annuity business is killing them, so to speak, and they are betting that 2009 will be much better, which is dicey.

At the time of publication, Cramer had no positions in the stocks mentioned.

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