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Strategies & Market Trends : Strictly: Drilling II
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To: t4texas who wrote (25345)1/10/2003 8:36:46 PM
From: energyplay  Read Replies (2) of 36161
 
FannieMae - another interpetation is that showing EXACTLY how Fannie's position differs from GAAP tends to reveal their postions in various securities and derivatives that they use to compensate for pre-payment of mortages and other items.
Knowning Fannies positions and what they will need to do allows hedge funds and speculators to "front run" or "shoot against" changes in Fannie's positions.

This already happened over the summer when Fannie needed to buy lots of Treasuries to compensate for mortgage pre-payments - everybody got on the bandwagon and bought Treasuries, pushing rates down sharply.

I don't expect them to write a statement that says " We need to hide this stuff so we don't transfer ANOTHER 10 Billion to some sharpies on Wall Street."

More transparency would be reassuring, however.
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