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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: russwinter	11/8/2005 8:28:44 AM
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Rats abandoning the ship du jour: Tuesday, November 08, 2005 GSE's Sitting On 'Time Bomb': Pension Fund thehousingbubble2.blogspot.com The International Herald Tribune reports on steps foreign pension funds are taking. "Switzerland's $15.5 billion state pension fund plans to reduce its investment in U.S. bonds and dollar-denominated debt because of concern that rising U.S. government debt and interest rates may hurt the U.S. economy." "Higher market interest rates could lead to defaults on loans by homeowners and affect mortgage finance companies including Fannie Mae and Freddie Mac, Eric Breval, managing director of the Swiss pension fund, said during a recent interview in Geneva." "U.S. government debt stands at a record, and Congress has increased its scrutiny of Fannie Mae and Freddie Mac amid concern that their debt may be too large, posing risks for the economy. Together, the two companies own or guarantee almost half of the $7.6 trillion U.S. mortgage market." "'There is a greater risk in the U.S. than elsewhere,' Breval said. '"When you see some institutions such as Fannie Mae and Freddie Mac and the time bomb they are sitting on," something may happen there one day, and we want to be less exposed.'"

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