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To: energyplay who wrote (35334)	6/24/2003 8:27:58 PM
From: TobagoJack	Respond to of 74559

Hello energyplay, Banks do not own much individual mortgages (individual contracts), but they most definitely do own mortgage-backed securities that are sold by Fannie and Freddie who packaged them from the bits of paper sold to Fannie and Freddie by the same banks. At the bitter end, the same poison has been diffused into nooks of the entire financial construct, in banks, GSCs, and the bond portfolios of J6P. The mortgage-backed securities are part of the asset/capital base of the banks, and these assets will decrease in value when the market interest rate rises. When so, the counter-party action/reaction on all the interest rate derivatives that had been put in place by Fannie and Freddie and the banks will be a sight to fascinate.;0) Chugs, Jay