Subscribe to this blog's feed"Apocalypse" and "revelation" mean the same thing - one in Greek, one in Latin, both come from root words meaning 'unveiling', the idea that, as a poker player would put it, it's time to show what you've got. For forty years the US residential mortgage market has puttered along in a state of productive uncertainty, underpinned by the quasi-socialist bedrock of the government-sponsored entities, Fannie Mae and Freddie Mac - which benefitted from an implicit, unwritten US government guarantee.
Now? Not so much.
We'll have much more on this later today and later this week, but in the meantime here are some thoughts:
What will this do to US government debt, given that the GSE's mortgage holdings are equivalent to half the national debt?
CDS: Fannie Tighter, US Wider
Why is the treasury so intent on protecting debtholders - and even shareholders! - rather than forcing a haircut? Roubini: Restructure Fannie, Freddie Debt, Skip "Mother of All Bailouts"
What did the Fed know and when did it know it? Freddie and the Fed Rumors
Who are the biggest debt holders?
Too Chinese (and Russian) to fail?
Is this just another case of private profits and public risk? Time for comrade Paulson to pull the plug on the Fannie and Freddie charade
And a colleague sends this, which reminds us that a year ago the GSEs were being used to shore up the mortgage market:
Fannie and Freddie Mac act over sub-prime crisis
