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Rubicon Associates is headed by a Chartered Financial Analyst with over 20 years of experience in the investment management industry focused on the analysis, investment and management of fixed income and preferred stock portfolios. Over the years, he has analyzed and invested in both public and... More
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  • Barney Frank on the Agencies 2 comments
    Mar 5, 2010 10:20 AM | about stocks: FNMA, FMCC
    On the tape:
    Fannie Mae and Freddie Mac bondholders shouldn’t assume the government will make them whole on their investments as Congress retools the companies, House Financial Services Committee Chairman Barney Frank said.
    “Please don’t think this is federally guaranteed, I don’t think it is, I don’t think it should be, I don’t feel any obligation to bail you out,” Frank told reporters after speaking to a conference of black, Hispanic and Asian Realtors in Washington today. Congress will “certainly not” extend any new protections to bond and mortgage-security investors beyond what exists, Frank said.

    A “whole range” of options is being considered for investors in the two government-seized companies, “from paying nothing to a haircut to whatever,” Frank said.

    Representative Scott Garrett, a New Jersey Republican, is pushing legislation that would bring the companies’ debt obligations onto the federal budget, which Frank said would result in explicit government backing.

    “We’re not remaking Fannie and Freddie,” Frank said. “We’re going to start from scratch and do housing finance.”
    Two things:  I promise this is the last post on the agencies today, and I wonder if he meant "no bailout for hedge funds and institutions, but maybe for the foreign centrals (spelled PRC)".

    Never a dull moment.  Still long tose FNM and FRE preferreds?  Best of luck with those.

    Disclosure: No Positions
    Themes: Agencies Stocks: FNMA, FMCC
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  • Tom Au, CFA
    , contributor
    Comments (6795) | Send Message
    The New Jersey Republican is at least an honest man. Barney Frank, on the other hand, says one thing and means another.
    5 Mar 2010, 11:41 AM Reply Like
  • Rubicon Associates
    , contributor
    Comments (1927) | Send Message
    Author’s reply » And lets not forget, the honorable (well...) Mr. Frank is head of the banking committee. My question: where the heck was he? He opines on nearly everything as an expert, but missed the biggest meltdown in 70 yrs. Repeal Glass-Steagall - eliminate too big to fail. Huh?
    5 Mar 2010, 12:54 PM Reply Like
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