Financial Losses Mount at Fannie Mae and UBS

Fannie Mae posted a $2.19 billion loss, forcing the company to cut its dividend and seek a $6 billion capital infusion. FNM stated that home price declines this year are exceeding its estimates and blamed a large portion of the $8.9 billion in credit and derivatives losses on the markets in California, Florida, Michigan and Ohio. Somebody tell FNM to stop getting its estimates for home price declines from the National Association of Realtors.
UBS posted a $10.9 billion loss, mostly due to $17.3 billion in losses from its weak investment banking unit. The bank plans to slash its workforce by 7% and sell $15 billion in distressed assets to a new fund which BlackRock will manage. Interestingly, the CEO of UBS didn't mention that the "worst is over." He may have been too busy tallying up the mounting losses of each unit, and the rising exodus of capital from its asset management division. The market is actually pointing to a lower open on the disastrous financial performance of these two financial firms. Perhaps it is starting to sink in that it may be decades before we ever return to the frantic levered investing environment during the boom, if at all.