Fannie & Freddie: Treasury’s (one) Billion Dollar Fig Leaf

Hat tip to twist for getting me to look at this.

I don’t know if this is a coincidence or Geithner told the gnomes of Mahwah that he didn’t want to see the total market cap for FHFA’s conservatorship GSEs go much below a billion dollars.

Anyway, last Friday the value of common shares for the two Enterprises closed as follows:

  • Federal National Mortgage Association (Fannie) — $623.27M
  • Federal Home Loan Mortgage Corporation (Freddie) — $376.52M
  • total (approx) — $999.79M

… which, if my mental arithmetic is working today, differs from $1B by around $210k — about the value of a single typical nothing-down 2005 Countrywide mortgage on a Treasure Coast basement condo presently being held by BoA at par ;)

Considering that F&F are theoretically responsible for much of the hundreds of billions or trillions of dollars of unrealized loss from the bubble, how in the world can anyone continue to pretend that they are still real companies?

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1 Comment for this entry

  1. JimAtLaw says:
    February 28, 2011 at 9:25 AM

    I don’t think anyone thinks that – anyone who buys the stock is simply betting on further naked market manipulation by the administration.

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