Fact or Fiction?

Let's look at FRE's website today and play Fact or Fiction!

Freddie Mac has lost billions of dollars more than most other financial companies in 2008.
Fact
Fiction

This is Fiction. The facts are that as of August 6, Freddie Mac has reported $151 million in first quarter and $821 million in second quarter losses in 2008. So, while Freddie Mac is not immune from losses in the current downturn, its losses during the first half of 2008 were lower than those reported by other large financial and mortgage related firms.


Freddie Mac has already been bailed out by the government.
Fact
Fiction

This is Fiction. The facts are that Freddie Mac has not asked for, and has not received, federal funds. We do not believe we will ever need federal funds. The Treasury Department says the government has "no intention" of using its authority to invest in Fannie and Freddie.

Freddie Mac has approximately $3 billion of capital above its statutory and regulatory requirements.
Fact
Fiction

This is Fact. Freddie Mac had an estimated $37.1 billion in core capital as of June 30, which is an estimated $8.4 billion above the statutory minimum and $2.7 billion over the 20 percent mandatory target surplus required by our regulator.


Freddie Mac must immediately raise as much as $75 billion in new capital just to survive.
Fact
Fiction

This is Fiction. The facts are that Freddie Mac had an estimated $37.1 billion in core capital as of June 30, an estimated $8.4 billion in excess of the company's statutory minimum capital requirement, and $2.7 billion above the 20 percent mandatory target capital surplus. That's enough to weather the current housing downturn.


In this year's turbulent housing market, Freddie Mac has funded $300 billion of mortgages.
Fact
Fiction

This is Fact. Each month Freddie Mac finances tens of thousands of mortgages, pumping billions of dollars into the economy. While other investors have fled the market, Freddie Mac invested nearly $300 billion during the first six months of 2008.

Mortgage rates are up because Freddie Mac is paying higher yields on its debt.
Fact
Fiction

This is Fiction. The fact is that while mortgage rates have risen in recent months, they remain near historic lows. For example, rates on 30-year fixed-rate loans currently are about 6.5 percent, according to Freddie Mac's Primary Mortgage Market Survey. That is lower than the average annual 30-year rates in 32 of the prior 37 years. What's more, FHA rates are rising at the same pace as conforming rates, although FHA is fully backed by the U.S. government. This means investors have confidence in Freddie Mac.

Freddie Mac is paying record yields on its debt because investors have special doubts about Freddie Mac.
Fact
Fiction

This is Fiction. The facts are that Freddie Mac is paying higher yields relative to Treasuries, but so is everybody else, which is not surprising given the turmoil in the markets. On August 19, Freddie Mac's debt auction of 5-year notes was priced 113 basis points above yields on Treasury notes. But, comparable spreads on securities issued by AA-rated financial companies have risen to about 250 basis points above Treasuries.

The market is shunning Freddie Mac debt.
Fact
Fiction

This is Fiction. The facts are that recent Freddie Mac debt issuances were oversubscribed, despite high market volatility and generally slow summer activity in the markets. Freddie Mac continutes to enjoy access to the world's debt markets at attractive spreads. This shows Freddie Mac is in a healthier financial position than many headlines suggest.
http://www.freddiemac.com/freddiefacts/fact_fiction.html

Here's a question they didn't have:

If any shareholders get wiped out, could they use Freddie Mac's website as a defense?
Fact
Fiction

I guess the answer is we'll know Sunday night!

No wonder Paulson said the plan would be "creative!"