What are the chances Fannie Mae & Freddie Mac will go Chapter 11 and investors will lose everything?
Why is Yahoo Finance giving them a green (UP) arrow on their website?
Tagged with: finance • up arrow • yahoo
Filed under: Freddie Mac Questions
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1. The US Gov SEIZED FNM, and FRE on Sunday, 09-07-08.
2. Chapter 11 can now only be filed by the USG, and that is not likely in my view.
3. The odds of losing all common and preferred equity in FNM, FRE, 99.999999999%,. I would say 100% but I’m hedging my answer by a ‘microscopic’ number. If the gov doesn’t wipe out the equity (likely), the class action lawsuits (one filed today) will wipe out the equity.
For more detail reading on the FNM/ FRE take over impact, please see my other post today, 09-08-2008.
http://answers.yahoo.com/question/index?qid=20080908105809AA2W2kl&r=w#BaN_M2D0AnhGUqjJm65y
I say about a 50/50 chance.
Chapter 11 is a reorganization to move ahead with business, not a Chapter 7 shut down. With the government backing these, seems to me they’ll do just fine in the years ahead. Of course, everybody is panicking today which is why at this very moment they’re trading around 75 cents per share. Betcha they double or more within the coming weeks. Flag this posting and see if I’m right.