Another $7 drop for FNM and shareholders won’t have anything left to worry about. And this despite the SEC’s enactment of an emergency rule to make shorting the stock more difficult. WSJ:
The Securities and Exchange Commission announced an emergency action aimed at reducing short-selling that targets Wall Street brokerage firms as well as Fannie Mae and Freddie Mac, and will immediately begin considering new rules to extend new requirements to the rest of the market.
SEC Chairman Christopher Cox said the SEC would institute an emergency order requiring any traders to pre-borrow stock before shorting Fannie Mae and Freddie Mac, the embattled government-sponsored entities that own or back more than half the nation’s mortgages. It would also apply to the stocks of Lehman Brothers, Goldman Sachs, Merrill Lynch and Morgan Stanley. The order is a near-term fix and will expire in 30 days.
Mr. Cox said the SEC “will undertake a rulemaking to address the same issues” across the market.
Meanwhile, economist George Bush assures country that financial system is “basically sound.” Thank goodness for that.
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