With stocks going down mortgage giants are in jeopardy by Zuzana Zelenakova

Financial sector in the United States is still facing instability which continuously disturbs mainly investors. On Tuesday, stocks ended surprisingly low for some, as for example Dow Jones which dropped to their lowest since 2006, despite the fact that oil prices went down $6,44 and thus settled on $138,74 per barrel. However, it did not put the minds of investors on ease. The economic situation in the country is still weak, with high energy prices people think twice before spending money. But probably the most concerning thing is that shares of Fannie Mae and Freddie Mac, which are both government sponsored enterprises authorized to make loans and loan guarantees and help in fact help to supply money for mortgages and housing purchases, fell again. Fannie Mae dropped $2,66 or 27 percent and Freddie Mac tumbled $1,85 or 26 percent. “Without these two companies this market is going to have difficult rallying,” said Peter Boockvar from Miller Tabak. “It´s getting to the point where the U.S. government is going to have to explicitly back these two companies or let them fend for themselves.” However, few days after the government announced that it will support Fannie Mae and Freddie Mac if necessary Treasury Secretary Henry Paulson stated at the Congress that there are no current intentions from the Bush administration to help the country´s biggest mortgage financiers financially or buy their stock. “It started with housing but it´s now turning into this issue of availability of capital,” said Jerry Webman, chief economist at Oppenheimer Funds Inc. in New York, about the problems in the financial sector. Housing market with low home prices is still not recovered and neither the job market is getting better. When it comes to investors who are extremely cautious despite recent news about high exports experts are rather skeptic and doubt that things can get much worse.


related story: http://news.yahoo.com/s/ap/20080715/ap_on_bi_st_ma_re/wall_street;_ylt=AnMEHIqNovUctCfXckDMrQes0NUE

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.<br><br><font size=2>These news are original content from young talents around the world and are selected for you by Chris Cantell.</font><br>

posted by Lucia Adamova