Fannie+Freddie= Very Nice, How Much?

$19 billion over the next three years or double that...or whatever... I just can't help but feel that Borat would have the right answer in the snap of gangrenous finger.

That is our official Fannie Mae/Freddie Mac cost projection. In what I guess is supposed to be construed as "good news", the Federal Housing Finance Agency's stress test reveal that 90% of the Fannie/Freddie fallout is behind us. Or not at all, who knows...officially...we guess...for sure.

As we have been told for a while now, by January 2011 we'll have the two agencies revamped and be living in a brand new world of change, prosperity and snail paced growth.

I don't even want to comment on this. I feel like I went duck hunting and found Donald and Daffy with "serve me Peking style" signs around their necks. It's not even fun anymore.

What do you guys think about the future of Fannie and Freddie? We've heard so much about this supposed revamp...yet for more than two years I haven't seen any evidence that things will be any different going forward.

Three card monte anyone?

2 Comments
 

"We say in Kazakhstan that if a horse charge you $19 billion, it is like a man charge you $19 billion."

The future for gramma Fannie and grampa Freddie is a crapshoot; like you say, the evidence surrounding a revamp doesn't support an entirely different world. I'll buy into that for now.

I would like to see a hypothetical scenario play out on how Fannie/Freddie would maintain their debt if they were given a cap on the amount of relief they took and compare that to the January 2011 outcome. The banks seemed to figure a way out (albeit, in the most haphazard of ways), let's see if a GSE can do the same.

In 1976, James Hunt broke the sound barrier through Eau Rouge only to retire before the event finished... following the race he had sex with three Belgian nurses at the clubhouse near La Source.
 

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