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This is just a step en route to nationalization. We are seeing a spiral down that will mean the U.S. Government will eventually step in. These organizations will fail without government support and they are too big to fail.
Fannie Mae and Freddie Mac had their bank financial strength and preferred stock ratings cut [...]

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From Bloomberg:

Paulson Statement on Freddie Mac, Fannie Mae: Full Text
July 13 (Bloomberg) — Following is the text of a statement issued today by Treasury Secretary Henry Paulson:
Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to [...]

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The Times of London is reporting that Treasury Secretary Paulson is looking to infuse Fannie and Freddie with $15 billion to help alleviate market turmoil. However they cite no sources in doing so.
Moreover, the $75 billion offered by Lehman Brothers which started this crisis is much closer to the amount of capital needed by [...]

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For other posts on Fannie and Freddie see ‘GSE ‘ label.
Going forward, Fannie Mae and Freddie Mac are going to be much talked about in the news. Therefore, as a reference, I am providing a list of big Washington Post stories dating back to 2005 below. Fannie, Freddie rise after dive a [...]

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Dean Baker has been on record since at least 2002 as predicting both the mortgage bust and the Fannie-Freddie collapse.
“If housing prices fall back in line with the overall rate price level, as they have always done in the past, it will eliminate more than $2 trillion in paper wealth and considerably worsen [...]

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I might have egg all over my face quicker than quick about my $150 oil call. It seems the Fannie-Freddie bailout chatter is spooking stock markets, currency markets and the oil market. This is going to be a volatile day.
The dollar dropped to a one-week low against the euro and headed for a [...]

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As I said in an earlier post, taking over Fannie and Freddie has been the plan all along for the Bush Administration. They have been planning this since at least March. Coincidentally, I have confirming evidence now. The New York Times reports that they are unveiling this plan for a bailout now.
They are only doing [...]

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Everyone should recall that Fannie Mae and Freddie Mac were forced to massively increase their already bloated balance sheet in the aftermath of the Bear Stearns collapse. It seems reasonable to me to assume that the two organizations did so only because they were given an implicit guarantee at the time by the government [...]

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The situation with Fannie and Freddie is coming to a head soon. Here are a few links on the chatter in the markets and on the blogosphere:
Fannie, Freddie `Insolvent’ After Losses, Poole Says – Bloomberg
U.S. Mulls Future of Fannie, Freddie – WSJ
Poole: Fannie, Freddie `Insolvent’ After Losses – The Big Picture
Former St. Louis President Poole [...]

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According to a Wall Street Journal report, the Treasury is concerned enough about the viability of Fannie and Freddie that they have discussed contingency plans in the case of potential bankruptcy.
Given the level of risk these two are taking on their poorly capitalized balance sheets in order to provide liquidity to the mortgage market, it [...]