Movers: Fannie Mae, Freddie Mac, Lehman, Hercules, Anheuser-Busch, GE
Freddie Mac (FRE) and/or Fannie Mae (FNM) shares plunge after U.S. Treasury Secretary Paulson says his department is continuing talks with FNM and FRE, and their primary focus is supporting the two companies in their current form. The statement follows a The New York Times report that senior Bush administration officials are considering a plan to have the government take over Freddie Mac and/or Fannie Mae and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday. The article states that, "Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee -- which could be staggering -- would be paid by taxpayers." S&P downgrades FRE to strong sell from sell, and FNM to strong sell from hold.
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