Warren Buffet warns Freddie Mac and Fannie Mae investors

As billionaire investor Warren Buffet voices his opinion on the already struggling Freddie Mac and Fannie Mae, his negative comments only push the share prices to tumble further down the dark hole of no return.

Moody’s Investors Service downgraded the companies’ preferred shares to one level above junk, and the Buffet in an interview with CNBC said the two companies have no net worth and that basically the game is over for them as independent companies.

Freddie Mac’s common stock slumped another 15 percent in afternoon trading, and Fannie Mae fell 8 percent, both stocks have lost more than 90 percent of their value since last year.

It looking likely that the United States government will have to step in and help the two companies out, as it looks like there could be even further downgrades.

Many investors are worried that if the bill that was passed last month to give the Treasury authority to bail out Freddie Mac and Fannie Mae by buying their debt and securities would then wipe out their common share value.

Source: bizjournals