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Piper Defends GSEs After Major Kick in Fannie from Mr. Market

The problem here is lack of transparency in a big chunk of the instruments these guys are stuck holding. Since the banks have been delaying (lying about) losses & their recognition, everyone assumes the worst & that more capital will be needed by the GSE's. Hence, the GSE stocks tank, credit ratings are lowered and the prophecy becomes self-fulfilling. Elegant. CDO's, securitization & tranching should be outlawed. These are instruments that are difficult to value & reduce market transparency. Lack of transparency & the ability for rumors to take hold has precipitated more than its share of bank runs over the years...