Freddie and Fannie

When I first heard about them many years ago I thought they were characters in a mock folk song. Of course I had heard the song but on the back of this there was a chippy little ditty about love, life and retribution in the picture houses of Tottenham Court Road. I was wrong of course they are:- US government charted mortgage financiers.

Freddie Mac – Federal Home Loan Mortgage Corporation ("FHLMC")

Freddie Mac's mission is to provide liquidity, stability and affordability to the housing market.

Fannie Mae – The Federal National Mortgage Association (FNMA)

Next week, for your homework tell me who are

• Farmer Mac
• Ginnie Mae
• Sallie Mae

Meanwhile back at the ranch, sorry the office, on March 19, 2008.
The Office of Federal Housing Enterprise Oversight (OFHEO) announced an initiative to increase mortgage market liquidity.

Washington, DC - OFHEO, Fannie Mae and Freddie Mac today announced a major initiative to increase liquidity in support of the U.S. mortgage market. The initiative is expected to provide up to $200 billion of immediate liquidity to the mortgage-backed securities market.

No shit. This could save all our bacon and bring world peace, justice ‘nd prosperity nearer to Crawford Texas!

OFHEO expected this, with other measures, to pump about $2 trillion into the mortgage market this year. OFHEO Director James Lockhart -

“Let me be clear – both companies have prudent cushions above the OFHEO-directed capital requirements and have increased their reserves."

So Jimmy ‘the legs’ Lockhart is happy to rip one third of the secured equity out of the heart of the US secondary mortgage market to provide an excuse to print more money. Yippee! Cream your buns baby! Sub prime and the credit crunch - an opportunity not a constraint!

Today, of course, some very old chickens, scrawny necks hung about with scraps of cardboard bearing the legend "moral hazard'', have been seen roosting on top of a ranch near Crawford, Texas!

Some doommongers are talking about dominoes!

Tee Hee! G Broon Esq. thought he had problems with Northern Rock!

Be afraid, be very, very afraid! It could get cold out there.