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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 366.09

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From: blazenzim	7/11/2008 8:01:32 PM
	Read Replies (2) of 217549

Here's how to temporarily fix the banking mess: 1. Formalize the govt. guarantee of Fannie and Freddie debt. This will cause gse credit spreads to collapse (thus lowering the cost of funds and expanding the interest earnings spread), force a massive rally in the stock prices due to short covering and greater confidence in the viability of the gse's. 2. Fannie and Freddie could then raise more private capital in the form of preferred and common stock at much higher share prices than today. 3. This would allow the gse's to greatly expand their balance sheets and soak up the garbage from the other troubled banks. 4. All financials would rally on this and other banks could then raise more capital. This would initially cost the government nothing and push off the problem to the next administration. I expect this to happen quickly. Full disclosure: Long uyg, fnm. LOL!!!

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