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Plan B: Nationalization
by Felix Salmon
Jul 14, 2008
Jul 14, 2008
Amazingly, the Paulson statement seems to have worked! Stock indices are in not-down territory, the dollar is up, Fannie's up 10% in early trade, and even Freddie's up 27 cents. Even if the stocks are trading wholly on option value, every indication is that the option value is higher today than it was going in to the weekend.
Then again, at this point Fannie and Freddie between them have a market cap of $16 billion, against $5 trillion or so in actual and potential liabilities, which means that to all intents and purposes they're trading at zero already. Now's not a bad time to nationalize them, as Chris Whalen says:
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