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Taking Bets On Freddie Mac, Largest Stakeholder Buys More

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Bill Miller is wagering Freddie Mac (FRE) will muddle through the mortgage crisis. Miller's Legg Mason Capital Management this summer boosted its stake in the struggling McLean, Va., mortgage company, according to a regulatory filing Monday. As of July 31, Legg Mason owned 80 million shares of Freddie, representing a 12% stake - making it Freddie's biggest shareholder. That's up from a 50 million-share stake as of March 31 and 15 million shares at the end of last year, according to Lionshares.com. Legg Mason reported the big increase in a month in which Freddie shares fell to a 17-year low on worries the company will need government help to handle huge mortgage-related losses - a bailout that could, some investors fear, wipe out common shareholders.

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::Freddie Mac Loses As Fewer Can Pay Loans
::Read the Washington Independent's analysis of the bailouts so far