Farewell, Fannie and Freddie
Make way everybody! The trillion-dollar gorillas are leaving the room.
The Federal Housing Finance Agency said Wednesday that
will delist their shares, now trading for well under a $1, from the
New York Stock Exchange
(NYX). The FHA, which regulates the two government-sponsored mortgage purchasers, said it expects Fannie and Freddie to trade on the Over-the-Counter Bulletin Board, an electronic quotation service, beginning next month.
The move to the minor leagues was not altogether unexpected. NYSE rules require a company to take action or delist if its shares languish below a buck for 30 trading days.
Still, it's quite shocking to see companies that together own or guarantee almost 31 million home loans worth about $5.5 trillion get the boot. Or, to put it another way, you know things are bad when mega-losers like
(AIG - Get Report)
are still hanging around while the two companies that control nearly half of all U.S. mortgages get escorted from the building.
Then again, at least AIG and Citigroup are operating under the pretense that they will repay Uncle Sam. That's certainly not the case with Fannie and Freddie, which have already sucked up nearly $150 billion in taxpayer funds and will likely request more bailout dollars down the road.
Come to think of it, it's almost poetic. They loosened their lending standards during the housing bubble and as a result are being forced from their home.
Dumb-o-meter score: 85 -- The NYSE foreclosed on Fannie and Freddie. How trippy is that?