Mr. Market says, "FNM & FRE are down nearly 60 percent from October." What does that say? It says that their silly little slice of capitalization isn't going to hold up all those trillions of dollars of mortgage paper, and that Cumbre Vieja of agency debt obligation is headed straight for Congress.
Yesterday the 1st deputy head of Russia's Central Bank asserted: "We are not investing in mortgage-backed securities, we are investing in government agency bonds"
The easing on portfolio limits and capitalization is just handing more rope to enterprises that, if they were to bother to update their computerized risk models, would easily see they've already hung themselves.
Sorry about the rant, tough weather here in Halifax; cheers, John
John M
@
Mar 03, 2008 09:27:05 AM
Flexibility = Government Bailout
As past experience shows, Fannie and Freddie can't be trusted even to file their financial reports on time, let alone make sure that the mortgages their buying are up to snuff.
The more flexibility you give them, the more taxpayers will have to bail them out in the end.
John M @ Mar 03, 2008 09:27:05 AM
Sara Bellum of TX @ Feb 29, 2008 13:42:49 PM
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