Fannie and Freddie Ordered to Delist from NYSE

Fannie and Freddie don’t live here anymore.

News just broke that the stocks of our two government stepchildren, Fannie Mae (FNM) and Freddie Mac (FRE), have been ordered to delist from the NYSE. The Washington Post reports, Fannie Mae, Freddie Mac to Delist Shares from NYSE,

The companies’ regulator, the Federal Housing Finance Agency, said Wednesday that it expects Fannie Mae and Freddie Mac shares to trade on the Over-the-Counter Bulletin Board, an electronic quotation service.

The move to delist the shares isn’t a surprise. The crash in the housing market has pounded Fannie Mae and Freddie Mac with heavy loan losses since 2007. Fannie shares have been below the $1 average price level for 30 trading days. NYSE rules require a company to take action to boost its shares or delist.

The simple fact is these stocks should have been delisted a long time ago and certainly no later than Christmas Eve 2009.  Remember that afternoon, along with your egg nog, you received a bill from Uncle Sam to support these stepchildren with a blank check. I highlighted in my commentary, Fannie and Freddie’s Blank Check Will Further Fuel America’s Rage,

Why aren’t these stocks delisted immediately? To allow stock in these entities to continue to trade is a total mockery of a legitimate market.

I believed then and still believe now that the trading of Freddie and Fannie since that point, if not prior to that, was a sham in which the NYSE allowed the churning of these shares by high frequency traders. For the privilege of churning the shares, the high frequency traders were paid rebates by the exchange. Call it what you want, but I call that a mockery and a sham. Equity exchanges were once founded upon the principle of the free flow of capital. Under the current construct of our equity exchanges, that is no longer the case.

In regard to our financial stepchildren, Fannie and Freddie, the fact that they are only now delisting is a joke. Regrettably the joke is neither funny nor inexpensive and will be a burden upon American taxpayers for a long time.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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