I'm not a mortgage expert but I'm going to give myself a pass today, because most mortgage experts are either busto, looking for other careers or very busy (the good ones) after what has happened over the last 12 months.
The NY Times and others this morning are talking about whether our valiant government led by the Fed will push Fannie Mae and Freddie Mac into conservatorship and take over their loan portfolios. There is a debate over whether they should and what will happen to the common stock holders.
My view is that they might as well do it, and soon. The bad loans on the GSEs' books are implicitly guaranteed by the U.S. Government anyway. Orderly demise of any large institution is preferable to sudden implosion or death by water torture. And finally, putting these two to rest will help the mortgage market find a bottom - arguably leading to fewer future defaults in the system and a more healthy mortgage market sooner.
GE reports in 20 minutes. Not much is expected. In an unusual move, they announced before they reported this morning that they are selling their Japan consumer finance arm to Shinsei for $5.4 billion.
No comments:
Post a Comment