Devoted to Managers and those that seek to improve their management skills

The report by Freddie Mac (FRE) that they've suffered a $2 billion loss in the third quarter confirms the housing market problems are far from over.  Third-quarter losses related to credit came to $1.2 billion, compared to the $112 million last year.

When you include the largest builder of homes in the U.S., D.R. Horton, reporting a loss of $712.5 million for the year, there is no way around that the problem isn't going to go away any time soon. We need to take that into consideration in managing our businesses and the impact it will have on us.

Freddie Mac Chairman and CEO Richard Syron said in a statement, "Without doubt, 2007 has been an extremely difficult year for the country's housing and credit markets and, as our third quarter financial results reflect, we have been impacted by the deterioration in these markets."

For Freddie Mac, they have taken a couple of steps to deal with the crisis.

One, they've hired Lehman Brothers Holdings (LEH) and Goldman Sachs Group Inc. (GS) to advise them on the best route to raise short-term capital for the company.

Two, it's taking a hard look at possibly dropping its common stock dividend by 50 percent for the fourth quarter.

If that isn't enough to rectify the situation, they may start to issue more preferred or convertible perferred stock, issue more common stock, limit their growth, cut back on the size of their portfolio and decrease its purchase into their credit guarantee portfolio.