Fannie and Freddie were thrown a government lifeline over the weekend but several regional banks with sizeable equity stakes in the two firms won’t be so lucky.
..

10 regional banks with exposure to Freddie Mac and Fannie Mae preferred stock*

- Gateway Financial ( nasdaq: GBTS ) (34%)
- Midwest Banc ( nyse: MBHI ) (32%)
- Westamerica Bancorporation ( nasdaq: WABC ) (16%)
- Farmers Capital (14%)
- Sovereign Bancorp ( nyse: SOV ) (13%)
- Flushing Financial ( nasdaq: FFIC ) (12%)
- Valley National Bancorp ( nyse: VLY ) (10%)
- Pulaski Financial ( nasdaq: PULB ) (10%)
- Columbia Banking ( nyse: COLB ) (8%)
- Astoria Financial ( nyse: AF ) (7%)

*Percentage represents holdings of Fannie Mae and Freddie Mac as a percentage of total tangible capital.

Henneke of Tyche Capital had this to say to CNBC:

The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.

“We expect a depression in the United States. We expect a depression, very possibly, also in Europe,” Hennecke said on “Worldwide Exchange.”

The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.

“We already have $3 trillion of debt, as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply.”

When the government can no longer pass the United States’ “immense debt” on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.

For the video: http://www.cnbc.com/id/26656750/site/14081545/

More from the Financial Times:

Cost of US loans bail-out emerging

By Krishna Guha in Washington and Michael Mackenzie and Nicole Bullock in New York

Published: September 9 2008 15:57 | Last updated: September 10 2008 00:34

The US on Tuesday began to face the financial consequences of the bail-out of Fannie Mae and Freddie Mac after Congress’s budget watchdog said the housing giants’ operations should sit on the government’s books and the cost of insuring against a US default crept higher.

With the stock market tumbling, the non-partisan Congressional Budget Office said the government takeover of Fannie and Freddie meant the companies should no longer be regarded as outside the public sector.

 A Separate Financial Times Article:

US move triggers CDS default

By Aline van Duyn in New York

Published: September 8 2008 19:21 | Last updated: September 8 2008 19:21

One of the largest defaults in the history of the $62,000bn credit derivatives market has been triggered by the US government’s seizure of Fannie Mae and Freddie Mac, raising questions about how dealers will unwind billions of dollars worth of contracts.

Although the $1,600bn of debt issued by the troubled mortgage groups is regarded as safe after the US government’s move to take control of the companies, their move into “conservatorship” counts as the equivalent of a bankruptcy in the credit derivatives market.

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