Bruce Krasting

Fannie and Freddie Are Surviving, But Barely

Richard, You are correct, the conservatorship mandates a run down of the GSE portfolio starting in 2010. That does not matter. They still have unrestricted capacity to guarantee new MBS. They have $3t of that. They could issue as much as they wanted under the exiting rules.

They are already in wind down. The balance sheets have been flat for both of them. Ginnie Mae and FHA having been picking up the on book asset side of this.

I do agree with you that this is a rat hole.