Friday, July 11, 2008


Here is another case of panic in the financial markets, sparked by comments of a former regulator. Note that the public relations statement sounds hollow by comparison to what is happening to the companies' shares. Just speaking to the media is not nearly enough to stop the run at this point. The two companies have to get into the trenches with traders and show them numbers that support the contention of their solvency going forward. Raw fear is the driver now, and it is like trying to stop a herd of cattle that have been spooked. The cowboys had to get to the head of the herd and turn it. That's just about what the companies have to do. Get ahead of rumors and rebut them. Fannie Mae and Freddie Mac are in for some rough days.


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