Volume Spike Investor

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are both indicated slightly lower this morning on news of a brokerage downgrade.  Keefe Bruyette & Woods downgraded both Fannie and Freddie from a prior “Market Perform” down to “Underperform.”  The target is effectively a ZERO…. KBW thinks that the common and preferred will effectively be wiped out if these two GSE’s are recapitalized and under some proposed lending guidelines for conforming loan limits in the future.

UPDATE at 9:06 AM EST… Fannie Mae (FNM) down 4.1% at $1.40 on 907,000 shares and Freddie Mac (FRE) is down 4.65% at $1.64 on over 800,000 shares.

At 8:05 AM EST FNM is down 2% at $1.43 on over 80,000 shares and FRE is down 1.7% at $1.69 on over 200,000 shares.  We will be giving updates throughout the morning before the open.  Average FNM volume is 120 million shares and the FRE average volume is almost 70 million.   -JON OGG