Fannie Mae and Freddie Mac are down 85.48% and 88.47% from their year highs. They fell after the Fed failed to confirm a Reuters story which suggested they'd be able to tap the Fed for emergency funding from the discount window. Suggestions that one of the two is technically insolvent and that only a Fed intervention will keep them liquid. Treasury Secretary Paulson has sought authority from Congress to buy equity stakes in Fannie and Freddie and increase lending to them both through a temporary increase in the limit on their lines of credit.
Indymac goes bust - the Government stepped in to take over IndyMac Bancorp at a cost of $4-8bn. IndyMac is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history. It had $32bn of deposits at the end of March. The bank will reopen on Monday as the IndyMac Federal Bank.
The IndyMac share price is 99.06% down from its year high and fell 64.29% in after hours trade. Lehman's fell 16.6% on more debt concerns. Citigroup down 0.55% - will sell German retail banking operations to France's Credit Mutuel for $7.7bn – covering losses from failed mortgages. Posts results this week.
First big wave of 2Q earnings results this week– 7 Dow companies and 53 S&P500 components – analysts forecast the S&P companies to be on average 10% down year-on-year. Results this week include Citigroup, JP Morgan, Wells Fargo, US Bancorp, Capital One and Merrill Lynch – big week for setting financial sentiment.
The Dow Futures are currently up a rather large 90 points suggesting a bounce on the Dow tonight.
Both BHP and RIO up in ADR form on Friday, 2.53% and 3.27% respectively. BHP up 3c to 4038c. RIO down 110c 12490c. Metals mostly up on Friday – Zinc up 1.72%, Aluminium up 0.89% and Copper 0.44%. Nickel down 1.39%.
Oil price up $3.49 to $114.96 on tensions between the West and Iran. Newcrest up 96c to 3243c. Gold up $18.60 to $9.60.60. Woodside up 65c to 6125c. US Bonds down with the 10 year yield up to 3.96% from 3.80%.
