Wednesday, July 9, 2008

This would be a 6th July event

The Fannie and Freddie doomsday scenario

Fannie Mae and Freddie Mac are government sponsored enterprises that help the mortgage market function by purchasing pools of loans and packaging them into securities. If one or both couldn't function, the result would be chaos.

Posted by holding out @ 06:48 PM (645 views)
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4 thoughts on “This would be a 6th July event

  • shipbuilder says:

    Would it? I always chuckle when journalists start throwing around terms like ‘armageddon’ and ‘chaos’. Everyone wants to be the one to predict disaster – they’re paid to do this, you know.

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  • I thought it was mainly the banks that did the packaging of loans into securities – “originate and distribute” and let somebody else hold them and take the risk. I thought Fannie and Freddy’s main role was to purchase and hold the securities as investors.

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  • i-cld-murder-a-blt says:

    It has gotta get worse, as these guys are all each others pockets.

    Its like the whole global economy has grossly overtraded.

    If there was any prudency then there would be no problem.

    It is a cycle, any layman can see this, and with a little education all is exposed.

    Its about time there was a clear out!!!

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  • planning4acrash says:

    Orchestrated boom, orchestrated crash.

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