Fed Backhands Fannie and Freddie Shorts

• Posted by ToddSullivan
• on July 13th, 2008

Bernanke sure does like these Sunday night releases

Release Date: July 13, 2008
For immediate release

The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fannie Mae and Freddie Mac should such lending prove necessary. Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities. This authorization is intended to supplement the Treasury’s existing lending authority and to help ensure the ability of Fannie Mae (FNM) and Freddie Mac (FRE) to promote the availability of home mortgage credit during a period of stress in financial markets.

Release:

Now, while the move may not spare shareholder pain for the foreseeable future, it does say that the Fed will not let them fail. Both companies have had value destroyed the past two years and this move will restore some of that.

It would seem Ben just does not like to see the shorts win…

Disclosure (“none” means no position):None

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