Friday, July 11, 2008


Gonna bring everyone down!

Mounting doubts over the ability of the companies led Deutsche Bank analyst Mustafa Chowdhury, a former Freddie Mac executive, on a Wednesday conference call to float the possibility that share prices could go below $5.

For the debt, much depends on the continued support of foreign central banks that have been loading up on the companies' $1.6 trillion in outstanding debt, a Deutsche Bank trader said on the call.

"If you are going to bail out Bear Stearns, the Congress is going to support Fannie and Freddie," said Andrew Brenner, co-head of structured products at MF Global in New York.

Yields on 10-year bonds issued by Fannie Mae and Freddie Mac ballooned 10 basis points to more than 1 percentage point above government debt. They had been quoted as much as 12 basis points wider than late Wednesday.

And Paulson is being clear as mud.

And the market is crashing.