What fueled this latest crisis in confidence was a Barron'sarticle last weekend that speculated the government's likelihood ofa takeover is increasing, Peter Cohan, principal of the consultingfirm Peter Cohan & Associates, tells GlobeSt.com. "That isdefinitely one of the reasons: the article said if Fannie andFreddie cannot raise the $10 billion each that they need, Treasurywill take over it and sell off its bad loans. Shareholders will beleft with nothing in that scenario."
According to public comments by Treasury Secretary HenryPaulson, no government takeover is planned. Fannie Mae and FreddieMac did not return calls in time for deadline.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
