Monday, Nov. 03, 2008
Freddie Mac and Fannie Mae Shareholders
The quasi-government backed mortgage buyers had the perfect structure to ride out any financial storm: the two entities were sponsored by the U.S. government, and loaded with former pols pulling down fat salaries and stock options. But Fannie and Freddie got caught in the downdraft. By being among the last outfits to jump into the business of crap mortgages, Fannie and Freddie basically loaded their balance sheets with more dry brush than California in August. When the market match struck, they went up in a hurry. And while Washington wasn't about to let the twin enterprises go under, no one in the Bush Administration was prepared to prevent the equity holders from being wiped out.