Investors seem increasingly convinced that if the government bails them out, their shares will plunge to zero, reports Alan Zibel for the Associated Press. Fannie Mae’s CEO reassured investors that a bailout isn’t imminent, but shares are still way down midday to their lowest point in nearly 20 years.
A government bailout package was unveiled on July 13 that included a plan to provide unlimited government loads to the mortgage giants. Critics say the bailout is too open-ended and could expose taxpayers to billions in potential losses.
Financial ETFs are breaking even so far in trading today:
- iShares Dow Jones U.S. Financial (IYR), down 3.9% year-to-date
- KBW Bank (KBE), down 28.3% year-to-date
- First Trust Financials AlphaDEX Fund (FXO), down 21.9% year-to-date