Looks like might be able to refer to it without using the word 'contingency.'
(Via Bloomberg)
Fannie Mae and Freddie Mac tumbled in New York trading to their lowest levels in more than 17 years on concern the government will be forced to bail out the mortgage- finance companies, wiping out common stockholders.
Fannie slid 22 percent, while Freddie dropped 25 percent after Barron's reported that the Bush administration is anticipating the government-chartered companies will fail to raise the equity they need to offset credit losses, prompting the U.S. Treasury to act. The companies' stock market values are well below the minimum of $10 billion in capital that each would need to raise to ``have any credibility,'' Barron's said in its story.
``We agree with the call for Treasury intervention and think it is very, very likely to happen before the end of the third quarter,'' Ajay Rajadhyaksha, the head of fixed income strategy for Barclays Capital Inc., said in a telephone interview today. ``Without government help, we think there is very little chance of Freddie completing a significant capital raising.''
It's hardly a sure thing - and 'Treasury intervention' could take many forms - but the rumblings are out there.
Get yer loans while you can, folks.
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