Fannie Mae, Freddie Mac Booted From NYSE
Should have seen this coming. Mortgage giants Fannie Mae and Freddie Mac, which has been run pretty much by the government since 2008, have been “asked” by the New York Stock Exchange to delist themselves and to stop trading stock. That’s because the prices have fallen very low, with Fannie Mae around $1 and Freddie Mac under $2. The minimum dollar amount allowed by the NYSE is $1 a share.
This is a blow both to the conservatorship and how the government has run them and the housing industry overall. Both of these entities loan and guarantee money to consumers and other lenders, and without the ability to raise capital on their own, it’s questionable how much support the federal government is going to be able to give them; they seem to have their own issues right now with unemployment, health care, and of course BP.
By the way, shares of both fell below $1 once the announcement was made, which means the NYSE pretty much sealed the fate of each company with the public request. Standard & Poor’s believes it’s going to get worse for both corporations before it gets better, believing that the earliest a turnaround might occur is in 2012. That’s bad news for both companies and the housing industry.