The common-share dividend will be reduced to 5 cents or less from 25 cents, McLean, Virginia-based Freddie said today in a statement.
Freddie had credit-related expenses of $2.8 billion, double the first quarter, and wrote down the value of subprime and low- quality mortgage securities by $1 billion as the biggest housing slump since the Great Depression increased delinquencies.”
Does a write down of $1 billion on “low quality mortgage securities” seem small to anybody else? Freddie owns or guarantees $2.2 trillion in mortgages…
I guess Freddie is super hedged, or has the best low quality mortgages ever. OR, they wrote everything down already because they were super honest and super conservative.
Freddie Mac (FRE) reported crappy earnings.
This last short covering bounce on the whole "no more naked shorts" scare closed the gap. Prices are hovering around support around $7.50. Failure here (likely) will result in a test of the lows where Paulson will step in nationalize the whole damn thing...
Fannie Mae reports tomorrow…
Ambac Posts $823 Million Net Income; CDO Losses Rise (Update1): “Ambac Financial Group Inc., the bond insurer that lost 92 percent of its stock market value in the past year, posted second-quarter net income after recording a gain related to its debt securities.
Net income rose to $823.1 million, or $2.80 a share, from $173 million, or $1.67, a year earlier, New York-based Ambac said in statement today. Excluding gains and other changes in the value of securities it holds and insures, Ambac had a loss of $1.53 a share because of expected claims on collateralized debt obligations, compared with an average estimate for a loss of 61 cents from five analysts surveyed by Bloomberg.”
Wait! What? Ambac (ABK) reported an
INCREASE in net income?
WTF? Lemme take a closer look.
Oh wait. It’s just another accounting scam. Phew! For a second there I thought there was real cash flow going on…
“A rise in the risk premiums on Ambac's own debt in the second quarter lowered the value of bond guarantees the company has outstanding, which was allowed to be reflected as a gain under accounting rules introduced in the first quarter.”
So, this is what
REALLY happened: “Excluding gains and other changes in the value of securities it holds and insures, Ambac had a loss of $1.53 a share because of expected claims on collateralized debt obligations…”
Ambac (ABK) has bounced almost 500%. Talk about short squeeze. This bounce should just about be done here at resistance around the $5.00 area. I don't advocate shorting stocks like these. Trading them intraday is one thing. Holding positions overnight on 'crack stocks' like ABK is quite another.
