Quote:
Originally Posted by rrram2
I heard fannie squeeling this morning, the government already backs them up so whats a bail out with some more funny money?
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The only explicitly guaranteed government agency among them is Ginnie Mae. Fannie and Freddie are implicitly backed, but are privatized companies at the end of the day. What "implicitly backed" has meant regarding their relationship with the government is easily spelled out on paper, but becomes an ambiguous and dangerous thing, creating the moral hazard everyone worries over when it comes to government assistance and bailouts.
Here's a decent summation of what's afoot:
Fannie Mae, Freddie Mac: The $5 trillion mess - Jul. 11, 2008