Today’s Rundown on Fannie and Freddie

Following up on the “insolvency” bit

  • Hank Paulson sidesteps questions on the issue. Let’s also note that “government-sponsored” does not mean government guaranteed, and obviously Mr. Paulson knows this.
  • The doomsday scenario, noting the government is counting on the siblings to fix the housing problem. Raising those caps isn’t looking like such a bright idea, just months later.
  • The Legg Mason Value Trust and its manager Bill Miller are feeling the pain. I feel a bit sorry for the fund owners – buying into drops is rarely a good idea.  What goes down can hit the ground – gravity rules us all.
  • But everyone breath easy – as has been said time and time again, they’re “adequately capitalized“…