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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (87578)	12/27/2000 9:00:55 AM
From: mishedlo	Read Replies (1) \| Respond to of 132070

Thanks Mike - I am about 40% in, but wish I waited at least 1 more day ggg (or got in earlier on DEC 18). I posted your reasons on another thread and got this back as a response. Comments? ========================================================= Fannie and Freddie are on a buying spree as banks rid themselves of mortgages in order to raise cash. Freddie's mortgage portfolio is showing nearly 50% growth for 2000(move over Cisco, the GSE's are in hypergrowth). Why are banks ridding themselves of a safe, stable, predictable investment which has always been an easy source of profits? My guess is that the are looking to raise cash to cover some potentially or already existing bad credit, notably in telecom, which now acccounts for roughly 30% of all corporate debt issuance, and also because of lingering recessionary concerns. In fact, I'm sure I read somewhere that BofA was shuffling any new mortgages out the door to the GSE's (BofA of course fessed up to having a large loan portfolio in the telecom sector). Banks are more fragile than the GSE's,IMO. But I will agree that Fannie and Freddie will face growing political scrutiny, that is an excellent point to consider. =========================================================== Maybe they are ridding themselves not of stable predictable values, but damn risky stuff if layoffs start to happen. M