| William Ackman, founder of activist hedge fund manager Pershing Square
Capital, criticized the possibility of a government plan to buy equity
in Fannie Mae and Freddie Mac. Ackman put forth his own plan to
restructure the two companies through raising capital from debt
holders. Common and preferred shareholders would get nothing in his
plan. Last week, Treasury Secretary Paulson asked Congress for
authority to buy equity and increase the government credit line to the
two government-sponsore d companies. Most saw the action as an
indication that the government was moving to explicitly guarantee
Fannie Mae and Freddie Mac debt. Ackman also said that he was shorting
the two companies as of July 10 and expects the shares to keep falling. |
