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To: The Freep who wrote (68205)	3/10/2003 9:32:39 AM
From: reaper	Read Replies (1) \| Respond to of 209892

09:30 ET Sec of State John Ashcroft says St Louis Fed President Poole has been sequestered in Guantanomo Bay for 'crimes against the state'. Cheers

To: The Freep who wrote (68205)	3/10/2003 9:38:49 AM
From: Ken98	Read Replies (1) \| Respond to of 209892

<<Fed's Poole-shocks to Fannie, Freddie could spread Monday March 10, 9:03 am ET WASHINGTON, March 10 (Reuters) - An unexpected financial shock at either of the top U.S. home finance companies, Fannie Mae (NYSE:FNM - News) or Freddie Mac (NYSE:FRE - News) 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. >> What's that boy been smokin?