The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: rich evans who wrote (234271)	12/24/2009 8:18:46 PM
From: James Hutton	Read Replies (1) of 306849

"So with the interest rate spreads available when your cost of funds is 0, both Fannie and Freddie should be able to earn back their losses from net interest income and fee income in about 10 years." So is this turning into a game of chicken between the bond market selling/not buying long treasuries and the Fed keeping interest rates low to, among other things, bail out Fannie and Freddie in 10 years? What happens if spreads narrow from their current record? I assume it takes longer for Agencies to earn their way out of the abyss?

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