Is Fannie and Freddie undercapitalized or are they alright?

Question

Yesterday I heard they needed to raise a combined 70 billion in capital. No i'm hearing this douche bag Ofeho say that they have enough capital...who's telling the truth?

Answer 1

It's easy. I think you answered your own question.

Look at the housing market.

Good, bad, ugly or "I think I picked the wrong week to quit drinkin?" (Airplane, 1980).

Now look at what firms are in that space.

Are they doing any better?

There you go.

There are a lot of people like Ofeho who are just trying to calm markets and prevent people from panic selling. The market isn't buying it. Historically, panic selling creates market bottoms!

Feel free to panic any time.

:-)

edit:

after market close today 07-09-08

FNM down 13.1%

FRE down 23.8%