Aug 6 economy today

Freddie Mac, the U.S. mortgage-finance company hobbled by record foreclosures, slashed its dividend at least 80 percent after posting a quarterly loss that was three times wider than analysts' estimates. Freddie dropped as much as 17 percent in New York trading and the larger Fannie Mae declined 14 percent on mounting concern that the government-chartered companies will sacrifice shareholders to bolster capital and avoid a bailout by the Treasury. Freddie doubled its reserves for future home-loan losses to $2.8 billion. Freddie has 22,000 properties in foreclosure, the most since the company was created in 1970 during the Vietnam War, and now anticipates losing 26 percent on each loan, up from 22 percent. McLean, Virginia-based Freddie has plunged 76 percent this year on concern the company may not have enough capital to overcome delinquencies on the $2.2 trillion of mortgages it owns and guarantees.

Crude oil futures have tumbled more than 20 percent since touching a record $147.27 a barrel in New York on July 11, a threshold often seen as the start of a bear market. Oil fell as low as $117.50 a barrel, amid signs of a global economic slowdown likely to curtail already weakening demand. The dollar today touched its highest in more than seven weeks against the euro, lessening the appeal of commodities as an inflation hedge. The decline follows a one-year doubling of prices as the dollar weakened, demand in Asia grew and Iran's nuclear program spurred concern that the country, the Middle-East's second- biggest oil producer, might face a military attack from Israel.