Monday, August 18, 2008

Foreigners selling Fannie and Freddie debt

I wrote here about what seemed to be the irrationally wide spread on Fannie and Freddie debt. We are after the Paulson plan. The US Government has promised it stands behind these entities. But the spreads still widen.

Widening spreads will cause the end - because Fannie and Freddie need to borrow humungous piles of money.

Now Naked Capitalism has a nice post on foreigners selling Fannie and Freddie debt. That seems irrational to me - but it is still happening - and that is not good news for the GSEs.

J

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