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Federal Home Loan Mortgage Corporation Message Board

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  • robchadwick robchadwick Jan 13, 2010 10:51 AM Flag

    We're in a nose dive....

    FRE/FNM have corrected back to where they were before Treasury's Dec 24th announcement.

    With congressional approval required to make any changes to the FRE/FNM arrangement after Dec 31 2009, those paying attention knew that Treasury was going to do something. In the currently political environment, congress isn't giving Treasury squat without a massive crisis evident, so people should have expected Treasury's grab to be a big one.

    So we're back to waiting for two things: in June of '09, and again in the Dec 24th Treasury statement, Treasury indicated that FRE/FNM's future would be discussed in the president's budget outline in February.

    So we have FRE/FNM earnings in Feb & the budget outline. FRE/FNM are a big tool in the administrations arsenal now to affect the housing/mortgage market.

    I'm inclined not to bet against the gov't in the short term. I think FRE/FNM are in for a bumpy ride, but I don't see common being wiped out, so I'll bet with the government on this one.

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