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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (31084)	4/22/2005 6:16:57 PM
From: ild	Respond to of 110194

NEW YORK (Dow Jones)--Risk premiums on agency debt narrowed Friday for the fourth straight session as investors continued to parse comments made by company officials, regulators and ratings agencies in three days of Congressional hearings on regulatory reform of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The highlight of the week was the appearance before a Senate panel of the chief executives of both Fannie and Freddie; both dropped their opposition to giving a new regulator the power to put their companies in receivership should they fail, but made their case against putting limits on the amount of mortgage they can hold. Nevertheless, it appears increasingly likely that some kind of constraints to Fannie and Freddie's portfolio growth will make it into legislation being proposed in both the House and Senate. It's not clear how much of an impact the debate had on agency spreads, however, since the market has already priced in expectations that Fannie and Freddie's portfolio growth will be tempered by difficult market conditions and increased regulatory oversight. Agency spreads may also have benefitted from a reduction in two factors that appeared to weigh on the market the previous week - generalized concerns about credit quality sparked by profit warnings from automakers and mortgage-related hedging in the swaps market.