Talk about a sh*tkicking. Not just for investors, but many banks and mutual funds were holding both. Many mutual fund investors had them in their RSPs and RIFs and probably didn't even know it.
Both companies hold around half of the $12 trillion of mortgages in the U.S. and they went belly-up! How could they run out of money?
It's kind of funny in a sick way. A couple of weeks ago the media was celebrating when Freddie Mac raised $2 billion in financing. \
Well, both Fannie and Freddie have $230 billion in debt that is coming due by the end of the quarter!
That's like feeding an elephant a box of Kraft Dinner and hoping it helps!
But here's the scary part.
There's $871 billion in debt coming due by the end of the year by other financial institutions!
Roger Biduk is an investment advisor for Union Securities and has no position in the above-mentioned companies.
rogerbiduk@rogerbiduk.ca
www.rogerbiduk.cs
Monday, September 8, 2008
Roger Biduk - More U.S. Homeowners in Trouble
Roger Biduk writes:
Here's some scary stats:
According to The Mortgage Banker's Association, though the second quarter of the year, 9.2% of mortgages (a record) are either in foreclosure or behind in their payments.
That's up from 6.5% from last year and 8.8% last quarter.
Plus, delinquencies were at 21% when it came to sub prime adjustable-rate loans in the second quarter....uh-oh...
Visit my website at rogerbiduk.ca
Drop me a line at rogerbiduk@rogerbiduk.ca
Here's some scary stats:
According to The Mortgage Banker's Association, though the second quarter of the year, 9.2% of mortgages (a record) are either in foreclosure or behind in their payments.
That's up from 6.5% from last year and 8.8% last quarter.
Plus, delinquencies were at 21% when it came to sub prime adjustable-rate loans in the second quarter....uh-oh...
Visit my website at rogerbiduk.ca
Drop me a line at rogerbiduk@rogerbiduk.ca
Roger Biduk: Weakening Global Econonies May Hurt U.S. Companies
Roger Biduk writes:
With the global economies weakening, stocks of many U.S. companies may be in for a rough ride.
Economic forecasts for economies in Asia and Europe have been lowered and that downward shift in global economic growth is a negative for many North American companies for two reasons.
The first is that there are so many U.S. companies depending on foreign growth and revenue. The second is that with the strengthening of the US$ against foreign currencies, you get a double whammy.
Since the U.S. was the first to see a huge slowdown in their economy and other countries later following, it looks like the US$ is saying that the U.S. should be the first to rebound.
But it's anyone's guess. The dramatic drop in the price of oil may help, but there's lots of analysts out there who say that the markets may test their lows they saw in July before rebounding.
Roger Biduk can be reached by email at rogerbiduk@rogerbiduk.com and his website at www.rogerbiduk.com
With the global economies weakening, stocks of many U.S. companies may be in for a rough ride.
Economic forecasts for economies in Asia and Europe have been lowered and that downward shift in global economic growth is a negative for many North American companies for two reasons.
The first is that there are so many U.S. companies depending on foreign growth and revenue. The second is that with the strengthening of the US$ against foreign currencies, you get a double whammy.
Since the U.S. was the first to see a huge slowdown in their economy and other countries later following, it looks like the US$ is saying that the U.S. should be the first to rebound.
But it's anyone's guess. The dramatic drop in the price of oil may help, but there's lots of analysts out there who say that the markets may test their lows they saw in July before rebounding.
Roger Biduk can be reached by email at rogerbiduk@rogerbiduk.com and his website at www.rogerbiduk.com
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