Too big to fail?
Not when you see the stench being hidden in the books of these out-of-control disasters-in-the-making.
And think it's bad now? Just wait until conforming start melting down. It's not just subprime. It's not just Alt-A. It's everything. And Fannie and Freddie are holding the stinking bag.
Now watch your clueless and corrupted Congress try to prop up these disasters. And watch Ben Bernanke freak out, slash rates and absolutely destroy the US dollar - anything to prevent Fannie and Freddie from imploding.
WASHINGTON (Reuters) - If anyone thinks the current U.S. housing downturn is bad now, things would get far worse if Fannie Mae or Freddie Mac were to suddenly stop buying mortgages, a move that would drive up the costs of home loans and devastate the economy.
Fannie Mae and Freddie Mac, the nation's two largest sources of mortgage finance respectively, recently reported combined losses of $3.5 billion. Borrowing costs have skyrocketed and investors have erased billions of dollars in each company's equity market capitalizations.
Few think the two companies are likely to pull out of the housing market, even temporarily. However, if the stream of home loan failures were to force the companies to suspend new mortgage investments, the market for mortgage bonds would "freeze up," said Tom Sowanick, chief investment officer of Clearbrook Financial LLC
Fannie Mae and Freddie Mac own or guarantee a combined $4.8 trillion of U.S. home mortgage loans of more than 40 percent of the total outstanding