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

To: Mike Johnston who wrote (51416)	1/25/2006 5:37:24 PM
From: shades	Respond to of 110194

If not for implied government guarantee, GSE's would not survive either because they would not be able to compete without lower cost of funds or they would go into bankruptcy from bad loans. People over at krugmans board say the banks want fannie, freddie to die so they can profit and this would be bad for the poor people needing good subsidized housing - why does the world HAVE to be all socialism all capitalism - all black and white - what cant it be mixtures of this and that? DJ US Agencies: Spreads Widen In Line With Swaps . NEW YORK (Dow Jones)--Agency spreads were mostly wider Wednesday quiet trading, as the market continued to take its cue from swaps. "Swap spreads are widening after closing in on rich levels last week," said Jim Vogel, executive vice president at FTN Financial Capital Markets. He said the selloff in Treasurys was a contributing factor, but that the move was driven primarily by short-term, technical factors. For the next two weeks, Vogel anticipates that the focus on upcoming Treasury supply could renew the bid for agencies and other spread products. "The first-quarter auctions will be the first ones with increasing gross issuance in quite a while," he said. "That could create enough concern about ballooning deficits, reduced overseas demand and all of the usual fear themes to keep spreads more stable than last fall on any overall market price weakness." Meanwhile, the Federal Home Loan Banking System's Office of Finance launched its $4 billion sale of two-year global bonds during the session, according to dealers. The issue is expected to price later this week. Participants are also waiting for Fannie Mae to provide an update on activity in its mortgage portfolio during the month of December. On Tuesday, Freddie Mac said its holdings grew at an annualized rate of 29.9% during the month, bringing growth for 2005 as a whole to 8.7%. Unlike Freddie, Fannie has continued to shed assets in recent months as part of an effort to provide an additional cushion of capital above and beyond its reserve requirement. But some analysts say it's possible Fannie's portfolio stabilized or even grew slightly in December as mortgage bonds cheapened. Freddie Mac Reference Notes Coupon Maturity Price Over Tsy Change (basis points) (basis points) 4.625% February 2008 27.0 +0.5 .4.750% January 2011 36.5 +0.4 4.750% January 2016 39.5 -0.3 Fannie Mae Benchmark Notes Coupon Maturity Price Over Tsy Change (basis points) (basis points) 4.625% January 2009 25.0 +0.4 4.500% February 2011 36.0 +0.7 4.375% October 2015 34.6 +0.1 Quotes as of 1530 EST