The demise of Freddie Mac and Fannie Mae was less of an actual dumb thing, in and of itself, than a paragraph in the long, dumb history of capitalism. But in mid-June both finally succumbed, marking the closing of a chapter in the Great Recession....
Originally published on June 18 -- Make way everybody! The trillion-dollar gorillas are leaving the room.The Federal Housing Finance Agency said Wednesday that Fannie Mae (FNMA) and Freddie Mac (FMCC) 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 (AIG) and Citigroup (C) 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. TheStreet Says: The NYSE foreclosed on Fannie and Freddie. How trippy is that?
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