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View Diary: Freddie Mac & Fannie Mae Out of Money (16 comments)

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  •  Original poster was suggesting impending collapse (1+ / 0-)
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    Gary Norton

    From diary:

    "If you are concerned about the ongoing subprime mortgage melt down that will balloon during the first half of 2008 as the resetting of ARMs will peak/spike, allow me to suggest a melt down of Freddie Mac and/or Fannie Mae would be the equivalent of the 1906 San Francisco earthquake.

    There are many individuals here at D Kos better qualified and more experienced, that can explain the potential fall out of this impending collapse of Freddie Mac and Fannie Mae.."

    This is what I was responding to Gary. When I read impending collapse, my mind jumps to bankruptcy not Freddie will be seriously constrained from adding to it's mortgage portfolio. My point was that Fannie and Freddie are far from collapse. If you also read my post above, I brought up the risk that Freddie will be constrained from acting in the secondary mortgage market. As regard to their selling assests to cover their capital requirements, it depends on which assets you are talking about. Some could be sold to make money and some can't. How much is in either bucket is something that I can't predict because I don't have access to that kind of information.

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