rip fannie and freddie

[philcski]

Originally Posted by dalakhani

They sure dont Philly and they should just keep their mouths shut instead of trying to grandstand all the time. During Senate testimony this past spring you could just watch Bernanke's face in response to some of the questions. If facial expressions formed actual words, his was saying " you ****ing moron, how is an elected official asking a question as stupid as that."

On another note, interest rates should be going through the floor now that the fed gov has taken over the GSE's. The spreads between mbs and treasuries should close rather dramatically in the coming days. Interesting that the dollar continued to roll against euro and pound and that commodities continue to slide.

Logically, that would make sense. In truth it didn't happen- Treasury spreads actually went DOWN today despite the US Government theoretically becoming more "risky". ABX (an index which tracks MBS pools) AAA tranches only improved by a half a point, so about 5bps a year, and are still trading in the mid 40's dollar price.

Meanwhile, FRE and FNM stock plunged to 1/8th of their previous value, wiping out the remaining $10 billion of market cap- hitting the fine citizens of the United States directly in their 401k and mutual fund plans (which pretty much every "conservative" fund owned). Additionally, all CDS contracts written on FRE and FNM triggered a credit event with close to 100% recovery, which in simple math means if you bet one way or another and were RIGHT, you lost all the present value of that contract, so all of Wall Street took major hits today.

But they're coming to save us!!!