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.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (9463)	3/9/2003 12:06:42 PM
From: John Chen	Respond to of 306849

Nextrade,re:"AG...dwelling on what its end might do to the economy". AG sees siliver lining in this. People now have more money to spend and the FED has less need to print money for this purpose and print more to pay for the war, the building of the global homeland security.

To: nextrade! who wrote (9463)	3/10/2003 9:25:42 AM
From: nextrade!	Read Replies (3) \| Respond to of 306849

Fed's Poole-shocks to Fannie, Freddie could spread Mon March 10, 2003 09:03 AM ET reuters.com WASHINGTON, March 10 (Reuters) - An unexpected financial shock at either of the top U.S. home finance companies, Fannie Mae FNM.N or Freddie Mac FRE.N could inflict heavy damage on the broader U.S. economy, St. Louis Federal Reserve Bank President William Poole said on Monday. "Should either firm be rocked by a mistake or by an unforecastable shock, in the absence of robust contingency arrangements the result could be a crisis in U.S. financial markets that would inflict considerable damage on the housing industry and the U.S. economy," Poole said at a symposium on the two companies, known as government-sponsored enterprises. Surprises that destabilize financial markets can and do occur with some frequency, Poole said. Because of the scale of the short-term debt obligations of Fannie Mae and Freddie Mac, a problem at either company would spread quickly, he said. "A market crisis could become acute in a matter of days, or even hours," Poole said. The regional Fed president recommended the U.S. government withdraw one of the advantages it gives Fannie Mae and Freddie Mac to help expand U.S. homeownership -- the ability to lend either firm billions of dollars. This would make clear to markets that the U.S. government feels no obligation to guarantee the companies' debt. Fannie Mae and Freddie Mac should also be required to hold greater capital as a cushion, Poole said. "My sense is that the firms are vulnerable to nonquantifiable risks because their capital positions are so low," he said.