The three legged stool for the GSEs -- The Treasury's three prong attack to stabilized Fannie and Freddie seems to be a hit - a it would a big surprise if it weren't. Saying that it could buy equity helps to underpin the stock and give promise of more funding that could come were it to be needed. Planning to expand the Treasury credit line does much the same thing, even though no amounts have been mentioned. Getting the Fed to offer discount window services under certain conditions is the final and more immediate aspect of this three legged stool arrangement.
It's vague but that its strength -- While you can argue that the plans are all vague, that is partly what makes it effective. Paulson has said he sees keeping the GSEs operating in the manner they have been. The GSEs are part of the rescue plan so they have to be kept healthy. Understand that you understand all you really need to know about them. The treasury will fill in the blanks for amounts as needed.
Yes, but...When the crisis in housing passes there will be plenty of long knives out after Fannie in particular. But for now they are on our OUR side, helping to stem the decline in housing..
It's vague but that its strength -- While you can argue that the plans are all vague, that is partly what makes it effective. Paulson has said he sees keeping the GSEs operating in the manner they have been. The GSEs are part of the rescue plan so they have to be kept healthy. Understand that you understand all you really need to know about them. The treasury will fill in the blanks for amounts as needed.
Yes, but...When the crisis in housing passes there will be plenty of long knives out after Fannie in particular. But for now they are on our OUR side, helping to stem the decline in housing..
1 comment:
Two excellent views.
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