With shares of mortgage giants Fannie Mae and Freddie Mac continuing their slide today to new multi-year lows, the market once again is signaling that the two companies’ common shareholders are likely to be wiped out.
If that’s the case, some big names in U.S. money management could wind up looking very embarrassed for having held on to the shares.
Then again, those managers could make a good case for staying put at this point: They’ve already lost so much, on paper, that any further loss would be incremental.
At the moment, it’s impossible to know who’s still stuck with Fannie and Freddie. Money managers are required to file their holdings with the Securities and Exchange Commission each quarter, so we know who the biggest shareholders in Fannie and Freddie were as of June 30. But a lot has happened since then -- including the first climactic plunge in the shares in mid-July -- so it’s conceivable that some of the top holders on June 30 already have bailed.