Fannie Mae (FNMA)

[Donotunderstand]

Boston

Management at Fannie chose to invest profits - nearly 1B - in PLMBS as a great way to earn high interest

When those collapsed it was ugly

The argument that F and F did not need help includes the argument that it was wrong to mark to market their own paper and the TONS of PLMBS paper they owned .. as their values plunged

By GAAP rules then in place ---- F and F were in trouble all on their own as this was the requirement of all companies

One can arrgue that legitimately from both sides in hind sight but the need for action appeared clear to the GOV --- not as much for F and F to pay the bills but to AVOID any appearance of trouble ahead as Russia and China owned a ton of our paper (that is what happens when Bush adds Part D - invades IRAQ - cuts taxes - and does nothing to contain the soaring deficit thus created)