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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (397651)7/10/2008 12:15:34 PM
From: tejek  Read Replies (1) of 1575706
 
These are actually too big to fail, even if the equity for them isn't too big. They need to be recapitalized with emergency funding by the government, and the guarantee must be made explicit. Or else we can easily drop very, very big from here, because the departure of these two from the firmament will gridlock the markets in a way that Bear Stearns could never do.

You know what would happen to the dollar (and oil) if the treasury bailed out Freddie and Fannie? Our hands are tied.

If they fail, the dollar will go down big time. The dollar can recover fairly quickly....the recovery from a failed FRE and FNM will take a very long time. They are the backbone of our housing market in this country. They provide securitization. Without them, there is no housing market.
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