Fannie Mae Notifies NYSE and Chicago Stock Exchange of Intention to Delist

/PRNewswire/-- Fannie Mae (NYSE:FNM) today reported in a filing with the U.S. Securities and Exchange Commission (SEC) that the company had notified the New York Stock Exchange (NYSE) and the Chicago Stock Exchange (CSE) of its intent to delist its common and preferred stock. This notice was made in response to notification by the NYSE on June 15, 2010 that the company no longer met NYSE continued listing standards relating to the minimum price of Fannie Mae's common stock and to the issuance of a directive dated June 16, 2010 by the Federal Housing Finance Agency (FHFA), Fannie Mae's conservator, for Fannie Mae to delist its common and preferred stock from the NYSE and any other U.S. stock exchange where its common and preferred stock are listed.

According to a press release by FHFA, the Acting Director of FHFA directed both Fannie Mae and Freddie Mac to take such actions.

In accordance with SEC rules and regulations, Fannie Mae intends to file a Form 25 (Notification of Removal from Listing under Section 12(b) of the Securities Exchange Act of 1934) on or about June 28, 2010. Fannie Mae anticipates that the delisting of its common and preferred stock from the NYSE and CSE will be effective 10 days after Fannie Mae files the Form 25 with the SEC.

After the delisting of its stock, Fannie Mae expects that its common stock and all series of preferred stock that were previously listed on the NYSE will be traded in the over-the-counter market and quoted on the OTC Bulletin Board (OTCBB), a centralized electronic quotation service for over-the-counter securities, under a ticker symbol that has yet to be assigned. Fannie Mae expects that its common stock and preferred stock will continue to trade on the OTCBB so long as market makers demonstrate an interest in trading in the common and preferred stock.

Fannie Mae does not expect that the transfer of the trading of its common and preferred stock to the OTCBB will affect, in any way, Fannie Mae's ability to fulfill its mission to provide liquidity and stability to the mortgage market, or its focus on home-retention, foreclosure-prevention, and refinance efforts under the Making Home Affordable Program. The transition to the OTCBB also will not affect the company's obligation to file periodic and certain other reports with the SEC under applicable federal securities laws.

Certain statements in this news release may be considered forward-looking statements within the meaning of the federal securities laws, including those relating to our intention to take steps to cause the company to be delisted from the NYSE by filing a Form 25; the expectation that our common stock and series of preferred stock will continue to be traded in the over-the-counter market and quoted on the OTCBB; and the expectation that the transfer of trading from the NYSE to the OTCBB will not in any way affect our ability to fulfill our mission. Although Fannie Mae believes that the expectations set forth in these statements are based upon reasonable assumptions, future conditions and events may differ materially from what is indicated in any forward-looking statements. Factors that could cause actual conditions or events to differ materially from those described in these forward-looking statements include, but are not limited to legislative or other governmental actions relating to our business or the financial markets; our ability to manage our business to a positive net worth; adverse effects from activities we undertake to support the mortgage market and help borrowers; the investment by Treasury and its effect on our business; changes in the structure and regulation of the financial services industry, including government efforts to improve economic conditions; the conservatorship and its effect on our business (including our business strategies and practices); the depth and duration of weakness in the housing market and economic conditions, including the extent of home price declines and unemployment rates; the level and volatility of interest rates and credit spreads; the accuracy of subjective estimates used in critical accounting policies; and other factors described in Fannie Mae's quarterly report on Form 10-Q for the quarter ended March 31, 2010, and Fannie Mae's annual report on Form 10-K for the year ended December 31, 2009, including the "Risk Factors" and "Forward-Looking Statements" sections of these reports.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

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Federal Home Loan Bank of Atlanta Boosts Housing Market with Disbursement of More Than $9.4 Million in First-time Homebuyer Funding

/PRNewswire/ -- Federal Home Loan Bank of Atlanta (FHLBank Atlanta) announced today that it has disbursed in excess of $9.4 million to more than 1,000 recipients through its 2009 First-time Homebuyer Program (FHP), providing critical and timely economic support to the housing market. For each of the past 12 years, FHLBank Atlanta has offered the matching funds through its member financial institutions for down payment and closing costs of eligible first-time homebuyers in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and the District of Columbia.

Over 60 FHLBank Atlanta financial institutions accessed and closed down payment funds ranging from $1,882 to $10,000 to more than 1,000 homebuyers. Thanks to the funding, member financial institutions are able to expand their customer base, originate new mortgages, and attract new homebuyers into the market. The private funds -- derived from profits earned by the Federal Home Loan Bank of Atlanta -- serve as an attractive tool to bring more homebuyers into the market and also serve as a valuable form of equity that they can benefit from in the future.

Since the program's inception in 1997, FHLBank Atlanta has allocated more than $50 million to first-time homebuyers, which has allowed more than 9,000 families and individuals to purchase a home. FHLBank Atlanta estimates that for every $1 of FHP funding awarded, $17 is generated in new mortgage business for its member banks.

"FHP is stimulating home sales and mortgage lending in communities at a time when the housing market and the overall economy need this type of economic support," said Arthur Fleming, first vice president and director of Community Investment Services, FHLBank Atlanta. "Relationships created between first-time homebuyers and FHLBank Atlanta lenders are significant and can provide a strong base for recovery of the residential housing sector."

The 2009 FHP offering cycle opened April 1, 2009, and continued until the funds were fully disbursed to member institutions. Funds were provided on a first-come, first-served basis. Individual participants receiving FHP funds were required to complete a credit counseling program that includes educational training on the home-buying process including courses on household budgeting, mortgage financing, lending laws, and debt management.

The 2010 FHP offering will be announced in April 2010.


Some of the statements made in this announcement are "forward-looking statements," which include statements with respect to the Bank's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, many of which may be beyond the Bank's control, and which may cause the Bank's actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements.

The forward-looking statements may not be realized due to a variety of factors, including, without limitation: legislative and regulatory actions, changes or approvals; future economic and market conditions (including the housing market and the market for mortgage-backed securities); changes in demand for advances or consolidated obligations of the Bank and/or the FHLBank System; changes in interest rates and prepayment speeds, default rates, delinquencies and losses on mortgage-backed securities; political, national and world events; and adverse developments or events affecting or involving other Federal Home Loan Banks or the FHLBank System in general. Additional factors that might cause the Bank's results to differ from these forward-looking statements are provided in detail in our filings with the Securities and Exchange Commission, which are available at www.sec.gov.

New factors may emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business and financial condition. Given these uncertainties, we caution you not to place undue reliance on forward-looking statements. These statements speak only as of the date that they are made, and the Bank has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this announcement, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise, except as may be required by law.

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Everything You Wanted to Know About the Economy But Were Afraid to Ask

Finance experts from Emory University's Goizueta Business School recently tackled questions from Emory Magazine readers about all aspects of the economy, from housing and retirement to boom and bust cycles.

The full article, and more economic coverage, can be found in Emory Magazine's 2009 winter issue.

Q: If bubbles and crashes are cyclical and (seemingly) inevitable, why do financial experts never anticipate them? Never mind accurately predict, but even expect the end of the latest expansion? Why is “this time” always different?

A: You seem to be asking two questions. The first is why experts can’t predict the timing of economic cycles. The answer is that no business cycle is like the last one, since the structure of the economy and exogenous events (say, weather or wars) are always changing. Until recently, a number of economists were arguing that the days of sharp economic cycles were gone forever!

Your second question seems to ask why experts (and others) often behave as though a downturn in the economy will never happen. Part of the answer to this question is connected to the first: if I don’t know when the end is coming, what am I supposed to do about it? Alan Greenspan’s famous “irrational exuberance” warning occurred in December 1996. If you had heeded his advice and sold then, you would have missed another 75 percent run-up in the Dow Jones Industrial Average. Like the clock that is right twice a day, his crash finally came in 2000—but the Dow still stayed above its level of December 1996.

—Assistant Professor of Finance Ray Hill



Q: I will be 65 tomorrow. In such a bad economy, I wonder about the merits of my selling a house vs. a “reverse mortgage” and staying here. The house is too large for me now. But should I wait out the turnaround we all hope for soon?

A: Have you considered renting? The rental market is really (really) heating up. People who would have been in a position to purchase a home are not having luck either selling their own home to acquire the equity needed to buy a new home or getting approval for loans—these people are turning to renting.

Obviously you understand that getting a reverse mortgage doesn’t help you unload the house—your responsibility to repay the “reverse” starts when you do sell the house. Given that the interest rates on a “reverse” are pegged to the rates of T-bonds (which are at or near zero), it is probably not a good time to use this instrument.

I recommend that you rent your house out, rent a smaller, more affordable condo, and talk to a tax accountant about the implications regarding the rental income. You might be able to take care of all your concerns—your house, a smaller living space, and some extra income.

—Assistant Professor of Finance Tom Smith



Q: Is it accurate for media outlets to speculate in real time why the Dow and NASDAQ rise and fall? They tend to attribute the rise and fall to other current headlines (political elections, U.S. automakers, past employment figures). It seems they are mixing up macroeconomic signals and microeconomic practices.

A: The media (and many stock traders) seem compelled to offer their audiences an explanation for every movement in the stock market indices. As you suggest, however, most of the time these “explanations” are simply unverifiable speculation about events that happened to occur at the same time as the rise or fall in the stock market.


Commentators usually couch their explanations in anthropomorphic language, as if the market was a single-minded person. Instead, the “market” is the sum of thousands (millions?) of investors, all processing information and forming expectations in different ways. When an event is significant, completely unanticipated, and its effect is obvious (say, the 9/11 attacks), the media’s explanations will probably be correct—but who needs an explanation from CNBC on those occasions?

—Assistant Professor of Finance Ray Hill



Q: How long do you think this financial slowdown will last? For baby-boomers who were relying on their investments in the stock market to help fund their retirements, and given the slowdown in the real estate market, what do you suggest now as investments for the coming years?

A: Most economists predict the slump will continue through 2009 with modest growth returning after that, but some of the worst-hit real estate markets may take longer to bounce back. Don’t be afraid to invest your long-term money in the stock market, however. Stocks have had a horrible year, but the stock market tends to improve before the rest of the economy, so you’ll miss out if you wait for good news.

A rule of thumb is to invest “100 percent minus your age” of your retirement money in stocks. If you are 60 and nearing retirement, you should have roughly 40 percent of your retirement money in diversified stock funds (with some exposure to international stocks) and the rest mainly in fixed income securities like bond funds. The idea is that at 60, most people will live for at least two more decades, and bearing the risk of stocks will provide added return in the years to come.

—Associate Professor of Finance Clifton Green


Q: Until recently we saw the U.S. dollar depreciate against the EUR, GBP and the JPY, among other currencies. The boost to exports resulting from a weaker dollar was considered one of the few opportunities to help the U.S. Recently, however, and perhaps as a result of the world financial crisis, the dollar has regained some of its value. What is your opinion regarding the strength of the dollar going forward and the impact that will have on the ability of the U.S. economy to grow by becoming more investment- and export-oriented, as opposed to mostly consumer-oriented?

A: The U.S. dollar fell in value at a strong and relatively steady pace from its high values from 2002 right up to September 2008. The weaker dollar meant that U.S. products, both goods and services, were now relatively inexpensive compared to the products produced by many of our trading partners. America gained competitiveness, boosting exports of products. Further, we could now better compete with imports coming into the U.S. market.
Importantly, U.S. exports were also boosted by a second factor—the increased demand stemming from rapid economic growth abroad, particularly in emerging markets (U.S. exports nearly doubled from the recession of 2001 until autumn 2008). This was a crucial spur to the American economy, as this increased demand for U.S. production offset the rapid decline in housing construction starting in the summer of 2006, enabling us to stave off recession until 2008.

Now, however, the crystal ball of U.S. exports is murky, at best. Recession abroad will curtail demand for U.S. exports. Roughly 70 percent of our Gross Domestic Product has been household consumption. Given the frightening job market and losses in both stock and real estate wealth, it is hard to see this sector restoring U.S. economic growth. The remaining solution is a massive fiscal stimulus package of government spending increases and tax cuts—it seems to be the one engine that can pull us out of recession. The good news is that, if this can spur U.S. economic growth, consumption and business investment will return to growth. Best of all, the U.S. can help lead the world to faster economic growth, and the beneficial growth trend in U.S. exports can resume.

—Associate Professor of Finance Jeff Rosensweig, director, Global Perspectives Program


Q: Everywhere you look, the cost of goods, services, and materials has risen during the past two years. Now with lower fuel costs that affect the transportation cost of the goods we purchase, will the mega-retailers, restaurants, and other companies reduce their retail prices or enjoy the additional profits?

A: If just fuel costs were going down, we might see lower prices and higher profits for retailers and restaurants. Since August of 2008, however, the consumer price index has either dropped or stayed constant each month so we have actually entered a period of general deflation (not just lower fuel costs). These declining prices are not an opportunity for higher profits in the retail and restaurant sectors (which are both highly competitive) but, rather, an indication that sales are down and their businesses are really suffering as we enter a recession. Rather than higher profits, we are seeing business failures in these sectors (e.g., Circuit City).

—Assistant Professor of Finance Ray Hill

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Although $700 Billion Bail-Out is Only 'First Step' on Long Road to Repair Financial Markets, CornerCap Sees Opportunities for Smart Investors

PRNewswire/ -- Although the $700 billion bail-out legislation signed into law earlier this afternoon by President Bush should help set an orderly process for disposing mortgage assets, it is at best a first step to allow for stability and recovery of the nation's financial markets says Atlanta-based CornerCap Investment Counsel's chief investment officer, J. Cannon Carr, Jr.

Writing for the firm's quarterly newsletter, Carr says that even with the government's plan, credit markets are likely to remain tight until home prices and debt levels fall to rational levels.

"That will take time," Carr says. "Only the market can stabilize home prices." Moreover, with extreme risk aversion among lenders, Carr still anticipates a difficult year ahead for the economy.

"Despite the uncertain market, this is not a time for broad selling," Carr notes. "In fact, there are real opportunities available for the patient and disciplined investor."

The full text of Carr's commentary is available online and may be downloaded at no cost from www.cornercap.com/library/Newsletters/n2008fall.pdf .

Carr points out that the nation has experienced 10 recessions since 1945. In all but the most recent recession (2001) stocks slid as the economy slowed, but began their assent before the recession ended.

"Recognizing that it is impossible to call a market bottom, we believe the probabilities are in our favor and now is the time to take advantage of some increasingly attractive opportunities to make selective buys," Carr said.

His firm began increasing its exposure to consumer stocks earlier in the year, and now sees opportunities in Industrials and Basic Materials stocks, which are among the hardest hit on recession fears.

"While there are still potential land mines out there, a healthy balance sheet and flexible cost structure are keys to helping determine which stocks can weather the storm," Carr said.

According to Carr the nation's financial system cracked due to two issues: too much debt and falling housing prices. "Once the housing process stabilizes, the financial system can more accurately price transactions, and more importantly, evaluate asset risk and debt obligations," Carr said.

What started as "apparently" isolated problems in subprime mortgages over a year ago has mounted to a crescendo of scary news about the health of the U.S. financial system and the global economy Carr writes.

Even if the government successfully plugs the holes in the nation's financial dam, the pressure causing the fissures must still drop before the dam can truly hold, Carr says.

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