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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Activatecard who wrote (43183)	1/13/1999 12:17:00 PM
From: Knighty Tin	Respond to of 132070

SAF, Directly, nothing. FRE obviously doesn't lend in Brazil. However, it has an impact on the spreads this borrow short, lend long co. has to pay and on the valuation of its locked in at bottom rates portfolio. My contention is that this devaluation, just like the LTCG failure, will negatively impact spreads between low risk securities and high risk securities. This is bad for the bulk of garbage mortgages Freddie has in its portfolio. It also increasses default risk and slows activity in the mortgage market as the banks become de-liquefied, all of which impact FRE's eps. So, I see it as a hurtin' thang, if not the coup de grace I expect to occur sometime this year when short rates bounce. MB