Shares in Freddie Mac and Fannie Mae resumed their slide yesterday as investors reacted to an emergency announcement from the US Government on Sunday night that could significantly dilute their holdings.

Freddie and Fannie’s shares closed down 8.3% and 5% respectively in New York trading after the Government proposed plans to inject billions of dollars of taxpayers’ money into the companies, if necessary, by buying newly issued stock. Freddie Mac’s shares ended the day down by $0.64 at $7.11, while Fannie’s were off $0.52 at $9.73.

The Times