interpretation of FNM/FRE news

the bail out may be what finally pops the most overvalued piece of paper on the planet = the 10 year trez.

a bottomless pit of potential supply ahead of us.
 
Quote from daddyeaux:

the bail out may be what finally pops the most overvalued piece of paper on the planet = the 10 year trez.

a bottomless pit of potential supply ahead of us.
More...


did i miss something. did the US guarantee the debt of fnm and fre?
 
Quote from daddyeaux:

no money has changed hands..

all I think that has happened is that FRE and FNM wont have an auction that blows up on them..

then it's too late..
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Agreed. The Washington Powers do not want an auction to fail and hoping that time will solve FNM and FRE's problems.
 
Quote from KeithOmalley:

did i miss something. did the US guarantee the debt of fnm and fre?
More...

I suppose... if they cant sell paper. the government will have to buy it

once the gov. buys one piece of new paper, they have to buy future auctions..

there was no statement that said FRE and FNM have to stop lending.

so the taxpayer is on the hook for future auctions if no one else will buy the crap.

and these are billed as "prime" loans
 
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