Fears mount over Mae and Mac
Investors are betting that time is running out for Fannie Mae and Freddie Mac. Shares of the mortgage finance companies lost more than a fifth of their value Wednesday as fears mounted that the companies soon will need government support and any bailout would hang stockholders out to dry. Since Monday, stock in the two companies -- which together hold or guarantee half the U.S. mortgage debt -- have plunged nearly 40 percent and now are trading at lows not seen in nearly two decades. The two government- sponsored companies are the largest source of funding for home mortgages in the United States. But they have struggled with soaring losses from mortgage defaults. Washington-based Fannie Mae and Freddie Mac have lost a combined $3.1 billion between April and June, and investors fear the losses will continue to grow. Fannie Mae's stock fell $1.61 to close at $4.40, after hitting a low of $3.95. Shares of Freddie Mac fell 92 cents to $3.25, after earlier hitting a low of $2.95.
Cow hormone sale
Monsanto Co. is unloading a harvest of controversy with its $300 million sale of the Posilac cow hormone to drug maker Eli Lilly & Co. Posilac has never been a big part of Monsanto's future growth plans, but the genetically engineered hormone has gotten outsized public attention because of concerns about its effect on human health. The sale, announced Wednesday, means Monsanto's name won't be associated with a drug some activists call "one of the most hated products in the world." Posilac is the brand name for a hormone called recombinant bovine somatotropin, or rBST. It increases milk production in cows. Critics have attacked the drug as an unhealthy additive for humans and cows alike.
Gulf oil lease sales
Energy companies have placed $487.3 million in winning bids for the right to drill in the western Gulf of Mexico, knowing that they may get a chance later to also explore in other areas that have been off limits for decades. The lease sale Wednesday was the first to take place since President Bush last month lifted an executive ban on oil drilling off the Atlantic and Pacific coasts. Since then, politicians in both parties have signaled that they are willing to expand offshore exploration.
A second wave of foreclosures triggered by so-called liar loans threatens to prolong the mortgage crisis.