Fannie, Freddie Slam Banks

Another tough day.

By SHARE

It's a new sell-off, care of the usual suspects in the financial sector. This time, the culprit is the government-sponsored lenders.

Today's damage:

Fannie Mae (FNM) — Down 17 percent

Freddie Mac (FRE) — Down nearly 18 percent

The market is worried the pair won't be able to raise a combined $75 billion in necessary capital if new rules force the lenders to take huge chunks of mortgages back onto their books. The figures come from Lehman via Bloomberg, in a story that also raises fears of more write-downs.

That sent the Philadelphia KBW Banking Index (BKX) down nearly 5 percent and killed today's early trading rally on the Dow, S&P, and Nasdaq.

Simply put, markets can't rally until financials stop falling. Let's hope it happens soon.

TAGS:
Fannie Mae
Freddie Mac
  • Kirk Shinkle

    Kirk Shinkle is a senior editor for U.S. News Money and manages the Best Funds portal. Follow him on Twitter @KirkS or email him at kshinkle@usnews.com.

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