"Two-room" stock price jumped to escape the nationalization of destiny

United States mortgage financing agencies Fannie Mae and the beauty of premises on the second day Tuesday continuous stock price jumped, due to market all the more that they can escape being or Government took over the "two".

(http://finance.) Two room "stock price recently had dropped to nearly 20-year low, it is because investors worry as a further deterioration in the United States market," two "may not have sufficient funds to maintain the operation. If the final had to solve by the Government, then the common shareholders rights may vanish.

"Two" in the past four quarters are announced losing money. However, Citigroup and Goldman Sachs analysts on Tuesday said, there are other support "bedrooms" but without the nationalization of the way. "Two" or an insurer with all United States mortgage loans by nearly half.

Housing & Lawler Economic consulting firm founder Thomas Lawler in client report also noted that it was more that "Government release rescued ' bedrooms ' does not immediately into reality".

Fannie Mae stock price Tuesday rally 8.3% to $ 5.62 surge in u.s. stock prices the premises 20.1%, to $ 3.97. Two stock are set since 20 August the MSB, but since may have cumulative decline in more than 80%.

Citi and Goldman Sachs analysts believe that the Ministry of finance may be confident that the "bedroom" without the need for emergency funding to restore stability. And including relaxing capital restrictions, other means, and also helps to alleviate on Fannie Mae and premises-us stability concerns.

From Citigroup's Bradley Ball in a conference call that Fannie Mae and the premises of the United States has enough capital to absorb potential losses, to stay until the end of the year. A recent Wall Street Journal on the two Government-backed enterprises (GSE) confidence and clear and cloudy, but the Ministry of finance and regulatory authorities are paying close attention to the fact situation.

Worry not groundless

July the two agencies in mortgage lending investment continues to grow, despite this month they are expressed in funds will become more conservative. Premises and control portfolio size 7-on-year increase 14.9% to a record $, Fannie Mae, 7982 14.4-7581 billion.

But the reputation of the premises, July for the next few months of purchase and sale agreement size suddenly dropped to minus level, from June's 347 billion down to negative 3.25 billion. This gives them the ability to stabilize the cast shadows.

Recently the GSE slump, as investors worried that they might not be able to play a stabilizing role. Congress considers to be the case, further dampening. When Congress in July even give the Ministry of finance where necessary to provide the "bedroom" loan or equity.

Federal Reserve (FED) 5 August meeting records show that the Bank members were concerned that the "two" dilemma may result in the property market more sluggish. So worried that the market rumours emerged last week that the Government help in an emergency (e.g. nationalisation) may be inevitable.

Fannie Mae in the monthly report that its underwriting loans default rate in June rose to 1.36%, 5% for the month; the beauty of premises 1.30 insured loan default rate of 1% for the first time reached 1.01% 5 months 0.93%.

The Government may intervene in expected, standard and poor's will Fannie Mae and premises of subordinated debt and preferred share rating from "A-" to "BBB respectively cut +" and "BBB-".