The spotlight is on Fannie Mae and Freddie Mac Monday as the government said over the weekend that it would continue to sponsor the publicly traded companies. Shares of Fannie Mae and Freddie Mac declined in midafternoon trading, with shareholders digesting the questionable fate of the two companies as their health has been seen as a barometer of the mortgage crisis. The Fed on Sunday proclaimed its full support for Fannie and Freddie, saying it would prepare to lend to both companies. Some investors, however, feel the plan would be a humongous burden for the government, causing experts such as Goldman Sachs Group Inc. analyst Daniel Zimmerman to predict the two finance companies may head as much as 35% lower from their current levels. That negative sentiment was not good news for other financials such as Citigroup Inc., J.P. Morgan Chase & Co., Washington Mutual Inc. and Bank of America Corp., which traded down in early afternoon trading. - Gerald Magpily
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