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Article: Investor Jitters Deflate Fannie, Freddie Shares; Drop to 20-Year Low Follows Speculation About a Rescue
- Article from:
- The Washington Post
- Article date:
- August 21, 2008
- Author:
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Copyright informationThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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Shares of Fannie Mae and Freddie Mac tumbled more than 20 percent
yesterday, hitting their lowest levels in nearly two decades, as
investors fled out of fear that a government initiative to save the
ailing mortgage giants could render their stock worthless.
The stock sell-off came a day after Freddie Mac was forced to pay
an unusually high interest rate on five-year notes to entice
investors to purchase its debt.
While the companies continue to insist that their fundamental
finances are sound, investor confidence in Fannie Mae and Freddie
Mac has taken a pounding this week as speculation about a federal
government bailout has gained pace in the news media and among
market analysts.
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