WSJ Online: Fannie Faces $2.8 Billion Charge

Reuters is reporting that the Fannie Mae derivatives loss I have reported on the last few days will come in at $2.8 billion. This according to "sources familiar with the matter." The story was broken by the Wall Street Journal Online.

It goes on to say, "The losses would be in addition to the estimated $9 billion in losses related to derivatives that the mortgage giant already has said it will recognize..(The Journal)based its estimate of the new losses on Fannie Mae's second-quarter 2004 financial report." So that may not be the only quarter with losses.

I'm not sure the whole story is out on this because of this statement. "While Fannie Mae reflected those losses on its balance sheet, the Journal said it didn't include them in its earnings or regulatory capital." I don't know how you can "reflect" losses on a balance sheet without going through the income statement. Hmm. More as details emerge.