http://uk.reuters.com/article/burningIssues/idUKBNG6370020080710
Fannie, Freddie insolvent, Poole tells Bloomberg
Thu Jul 10, 2008 8:30pm BST
(Reuters) - Mortgage lenders Fannie Mae and Freddie Mac are "insolvent"
and may need a U.S. government bailout, former St. Louis Federal Reserve
President William Poole was quoted as saying in an interview with
Bloomberg.
"Congress ought to recognize that these firms are insolvent, that it is
allowing these firms to continue to exist as bastions of privilege,
financed by the taxpayer," Poole was quoted as saying in an interview
held on Wednesday.
Chances are increasing that the government may need to bail out the two
mortgage companies, Poole was quoted as saying.
Shares of the two companies have taken a beating recently on worries
about whether they can withstand more losses and sup****t housing as well
as concerns that they may need to raise massive amounts of new capital.
Freddie Mac shares tumbled 23.8 percent to $10.26 on the New York Stock
Exchange on Wednesday, while Fannie Mae shares sank 13.1 percent to
$15.31.
Poole could not be immediately reached for comment.
(Re****ting by Ajay Kamalakaran in Bangalore; Editing by Mike Miller)
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