horned toad lizard

Fannie and Freddie: Finally a Light at the End of the Tunnel?

One fact the author did not factor in was the fact the regulator for FNM and FRE has removed the minimum capital reserve requirement, thus greatly reducing the possibility of dilution from the senior preferred share agreement that both institutions entered into with the government.

Don't Blame Fannie and Freddie

Nice Job Mark. This is an informative and well researched article and one of the best descriptions of the genesis of this whole state of affairs I have seen yet.

Bill Gross: 'Pick Me! Pick Me!'

I agree with the author. These actions are entirely self serving. Gross wants the government to infuse money into the financial sector, thereby propping up the bonds of the companies therein, which he just happens to have a boatload of in the portfolio he manages. He isn't giving his opinion on what he feels would be best for the economy as a whole.

The Risk Of A Run On The Banking System

Come on Larry, you are rehashing quotes that are over a month old. Narayanan said that back in July. However, I am shocked...*SHOCKED*...... hear that a hedge fund manager that shorted the financial sector is trying up play up the possibilty of the worst case outcome in the entire spectrum of outcomes.

Fannie and Freddie Debt Offerings

Evidence of the bazooka Paulson was talking about. The government won't swoop in and take over if FRE and FNM can operate normally and that the government is more or less guaranteeing the debt, assuaging the concerns of buyers, FRE and FNM can operate normally (make debt sales at reasonable spreads).

Individuals Could Win On Fannie, Freddie Preferreds

Reasonable plan should it ever come to a need for government intervention, but I still am having trouble seeing why anything more than loans through the discount window should be necessary, especially when you take into consideration the ample amount of capital reserves available to both companies. For example, Freddie Mac has capital reserves of 2.7 billion beyond what the government required at the end of the 2nd quarter (it is not their total reserve) and their 2nd quarter loss was 821 million. Assuming losses per quarter are on par with the 2nd, that will keep them above what the government requires for three more quarters (barring steeper losses in upcoming quarters of course). Given these numbers, it is perplexing to me that this is even worthy of discussion at this point in time. Savie it for when FRE and FNM are really in dire need of help when/if that time ever arrives.