Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (85964)	3/27/2001 2:50:41 AM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

Fannie Mae goes a-yackin' on the Hill: nytimes.com This part sounds like complete and unwashed bull$hit: Fannie Mae said it also passed an interim version of a capital stress test -- it would survive under models assuming depression-like economic conditions for 10 years. The test assumes interest rates six percent higher than the current level and no new business for a decade. Notice that they don't address what happens with a high level of repayment failures/delinquincies and foreclosures coupled with increased prepayments...a situation that might be seen were rates to fall, as in a deflationary recession. The biggest threat is to their clearly inadequate reserves relative to the loans they (and inferentially, "we" the taxpayers) are guaranteeing. That's the biggest threat to FNM...and it appears to be ignored (?intentionally) in their risk modeling.