WORLD> America
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WORLD> America
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US government plan for Fannie, Freddie to hit shareholders
(Agencies)
Updated: 2008-09-07 09:20 The planned intervention reflects concerns among US officials that financial markets had begun to lose confidence in the companies, after they suffered combined losses of nearly $14 billion in the last four quarters.
The stocks of the two companies have fallen more than 90 percent in the past year and in recent months foreign investors have pared their holdings of the companies' securities. In an emergency move in July, the US Congress gave Treasury the authority to extend an undetermined amount of credit to the companies or take a stake in them if they ran into trouble. Echoes on Campaign Trail Paulson briefed Democratic presidential hopeful Sen. Barack Obama on Friday and Republican candidate Sen. John McCain on Saturday. Both said action was needed to protect the US economy, and McCain endorsed the government's plan. "I think it has to be done," McCain said in an interview with the CBS program "Face the Nation" to air on Sunday. "There's got to be restructuring, there's got to be reorganization, and there's got to be some confidence that we've stopped this downward spiral." At a campaign stop in Terre Haute, Indiana, Obama said he was withholding judgment until he could see further details and said determining the future of the companies would be a top priority if he won the White House. "We have to protect taxpayers and not bail out the shareholders and management," Obama said as he detailed the criteria by which he would gauge the plan. |
