Reuters – Freddie Mac on Wednesday posted its fourth consecutive quarterly loss, set plans to slash its common stock dividend and warned of more difficulty ahead amid the steepest U.S. housing market slump since the Great Depression.
Although I recently expressed a negative opinion of Fannie and Freddie Mac’s future, I was a little surprised with this announcement. I thought they would not even discuss cutting the dividend until after the elections. Although I think it was a necessary decision for Freddie Mac, I thought there was an implied agreement to not cut the dividend until things settled down. Tonight I heard the CEO on NBR and I was not impressed with his efforts to finesse the hard questions about Freddie Mac’s financial plan. Things are not settling down. The big losers in this sad affair are the elected officials who went to bat for Fannie Mae and Freddie Mac. I think that the housing bill was a huge stretch for our elected officials so this announcement is a bitter pill to swallow.
Freddie Mac reports loss of $821 million (Reuters)
Wed, 06 Aug 2008 12:22:15 GMT