Business

Fannie and Freddie horror to Asian financials

By Ben Hwang ⋅ July 15, 2008 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

As investors run like madmen from the Fannie Mae(FNM: 0.38 -19.15%) and Freddie Mac (FRE: 0.56 -9.68%) fiasco in the US mortgage arena, Asians are turning away from the banking sector due to the scare.

What’s interesting here is that there two corporations are not in the same boat as Bear Stearns (BSC: 5.76 0.00%) which was definitely going to financial ruin. Both Fannie and Freddie seem to have decent cash funds and their concerns for a federal bailout are more dealing with how much it’s hurting their area of the market. It’s actually very strange that even with the news that the feds were willing to lend and buy equity in the firms, that it didn’t alleviate the pain.

What’s more disconcerting is how much the Asian banking sector took the hit. Unless these banks have a lot of investment in US properties and these particular firms, I don’t see why they would be suffering on a whole across the board.

Overall, the financial sector has been kissing the floor in the last few months due to the American mortgage crisis and this mop isn’t done cleaning yet it seems.

Photo Credit: (merfam)

Tags: Fannie Mae, financial, foreclosure, Freddie Mac, mortgage