Fannie Mae-No Politics (FNMA)

[NeoSunTzu]

You state the obvious, but that has been what the unspoken debate about the GSEs has been ever since they're creation was the idea that the government had/has an implicit guarantee since these instutions are government sponsored enterprises - if you have not been aware of that debate on Wall Street then you have been been completely asleep. And no matter what any document says, what governments actually do is what matters and right now the FACT of the matter is the UST is one form or another for the past 15 years using the UST credit to ACT as if they are guaranteeing the securities - even though we ALL know the GSE have the earnings power to cover it. If the mortgage market entirely collapsed whatever the GSE show on their balance sheets would be completely wiped out and the UST would use the hundreds of billions the GSEs have paid back to cover it. Legally, at least right now, according to what is on the books, that would be a UST guarantee of the MBS securities. This is all the concept of implicit and explicit guarantees that the GSEs HAVE to state in their filings that it does NOT exist - when we know in reality it is how the govt and the GSE are de facto operating.