NY Times: Freddie Mac’s Big Loss Dims Hopes of Turnaround

[marmar]

Freddie Mac’s Big Loss Dims Hopes of Turnaround
By CHARLES DUHIGG
Published: August 6, 2008



The gloom over the nation’s housing market deepened on Wednesday as Freddie Mac, the big mortgage finance company, reported a gaping quarterly loss and predicted that home prices would fall further than previously projected.

The announcement disappointed those hoping that the housing market might be bottoming out and heightened worries that the government could be forced to rescue Freddie Mac and the other mortgage finance giant, Fannie Mae. The news also signaled that mortgage rates were likely to rise.

In filings with the Securities and Exchange Commission, Freddie Mac said that “there is a significant possibility that continued adverse developments” could cause the company to fall below government-mandated capital levels. In an interview, the company’s chief financial officer, Anthony S. Piszel, said that warning did not imply the company believed that risk was likely or imminent.

Freddie Mac and Fannie Mae, which lubricate the housing market by buying mortgages from banks and other lenders and touch nearly half of all the nation’s home loans, have been severely weakened by the slump in the housing market. The downturn has forced millions of Americans out of their homes, cost Wall Street hundreds of billions of dollars and helped depress the broader economy.

“Basically, things are still bad,” said Steven D. Persky, chief executive at Dalton Investments, a $1 billion fund in Los Angeles. “Freddie Mac is telling us that nobody really knows how much worse they will get.”

The results disappointed analysts who had hoped Freddie Mac might provide enough good news to point a way out of the economic darkness. The company’s results contained few rays of light. .....(more)

The complete piece is at: http://www.nytimes.com/2008/08/07/business/07freddie.html?_r=1&hp&oref=slogin

[madrchsod]

1. so everything is going back to 2000

but we have no jobs left,a military that lays in ruin,and a two trillion and counting debt because of a war that was illegal.no wonder no one in this country believes in our government anymore.

[earth mom]

2. Yep, we are back to the year 2000 while paying $4+/gal for gas & outrageous amounts for food....

while jobs disappear at a rapid pace.

We are SO screwed. :yoiks: