Freddie Mac (FRE) CEO Richard Syron has had a tough week. Yesterday, the Times detailed how everyone at Freddie had warned him about the mortgage meltdown. Today, Freddie posted a disastrous FQ4, missing analyst estimates by miles. So maybe we can attribute the lunacy of the following to stress. From Reuters:
"Previously, we said house prices would fall at least 15 percent nationally, peak to trough. Today's challenging economic environment suggests that the housing market is far from stabilizing," Richard Syron, the chairman and CEO of Freddie Mac, told investors in a conference call. "As a result, we now believe that national home prices will fall 18 to 20 percent peak to trough. ... The long and short of it is that we now think that we are half-way through the overall peak-to-trough decline."
18%-20%? The current consensus for the peak-to-trough decline is around 30%. The Case-Shiller Comp-20 index is already down 18.4% peak to trough. Syron may be looking at OFHEO numbers, which show a far less severe decline. For the sake of Freddie investors, we certainly hope so.
See Also: Freddie CEO: Don't Blame Me, Congress Made Me Buy Those Crappy Mortgages
Freddie Mac Posts Disastrous FQ4 Loss
