NEW YORK - The U.S. Treasury is growing increasingly likely to recapitalize Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) in the months ahead on the taxpayer's dime, Barron's reported in its August 18 edition.
The weekly financial newspaper said that such a move could wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.
An insider in the Bush administration told Barron's that Fannie and Freddie "are being jawboned" by the Treasury Department and their new regulator, the Federal Housing Finance Agency (FHFA), to raise more equity.
But government officials don't expect the agencies to succeed, Barron's reported.
If the government-sponsored enterprises fail to raise fresh capital, the administration is likely to mount its own recapitalization, with Treasury infusing taxpayer money into the agencies, according to the Barron's source.
http://rawstory.com/news/2008/U.S._likely_to_recapitalize_Fannie_Freddie_0817.htmlAny of you have any extra $$$'s to shoulder this REPUBLICAN MADE burden on top of all the other CON made disasters?