As the stock prices of Freddie Mac & Fannie Mae continue to plunge, the US Treasury Secretary and the US Fed are doing their best to calm things down. While they denied that Freddie Mac & Fannie Mae are insolvent, they claim that the GSEs are adequately capitalized.
Henry Paulson said that he had been assured by the regulator of Fannie Mae and Freddie Mac (The Office of Federal Housing Enterprise Oversight) that the companies have enough capital.
Talk about being behind the curve. As these Government sponsored enterprises (GSEs) are struggling to survive, and may need a GOVERNMENT BAILOUT themselves, the Treasury Secretary and the FED, expect them to support the collapsing US Housing market.
Will we see a Government Bailout or a further easing of their Capital requirements?
Clearly too big to fail!!!!!
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