Can anyone explain the stock prices of Fannie Mae and Freddie Mac, the two government-sponsored enterprises that are supporting our mortgage market?
On Friday, Fannie’s common stock closed at $2.04 per share, up 250% since the start of August. That values the company–to be precise, the privately-owned common shares in the company–at more than $2 billion.
Freddie Mac’s common shares closed at $2.40 per share, up almost 300% since the start of August. That values Freddie’s privately-owned common shares at more than $1.5 billion.
Collectively, then, the common stock of these two wards of the state totals almost $4 billion.
This seems a trifle high, however, since most observers think their common stock is worthless (see, for example, this AP story).
I think those observers are right.
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