Re: Fannie & Freddie
Posted by Sada Mosler on April 21st, 2008
(an email exchange)
>
>  On Mon, Apr 21, 2008 at 9:55 AM, Russell wrote:
>
>  Fannie and Freddie now back 82% of all mortgages in the U.S.,
>  up from only 46% in the second quarter of 2007. If they need
>  a bailout – could be a trillion dollars –
Funds are already advanced to the homeowners which supports demand.
A ‘bailout’ would only be an accounting entry between the government’s account and the agency’s account – no effect on aggregate demand.
>  the USA may lose its AAA credit rating.
Like Japan did. Just another sign of incompetance by the ratings agency if it happens.
April 21st, 2008 at 4:51 pm
What would that mean for the equity in Fannie and Freddie?
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April 22nd, 2008 at 10:23 pm
sorry, not my strong point! though i do think the congress will try to maintain their earnings ability, but don’t know how successfully.
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