Freddie Mac and Fannie Mae fell to the lowest in 13 years in New York Stock Exchange composite trading as concerns grew the two largest U.S. mortgage-finance companies may need to raise more capital to overcome writedowns and satisfy new accounting rules.
Freddie Mac fell 18 percent and Fannie Mae dropped 16 percent after Lehman Brothers Holdings Inc. analysts said in a report today that an accounting change may force them to raise a combined $75 billion. Speculation that the companies may take further writedowns also weighed on the stock, said John Tierney, a credit strategist at Deutsche Bank AG in New York....MORE
Warren Buffett sold the balance of Berkshire Hathaway's Fannie and Freddie positions in 2000.
"In 2000, we sold nearly all of our Freddie Mac and Fannie Mae shares..."
He was quoted as saying:
"We're never sure if there is an iceberg situation or not. We figured we'd never see it until it's too late."
