Fannie Mae-No Politics (FNMA)

[Donotunderstand]

a ton of community savings banks
allow me --- it is ugly

A bank - savings and loan - same difference
In its capital reserve holding is to NOT exceed 5% in any "one" name (e.g. IBM or MSFT or ?)

BUT
an exception to that wise diversification edict was -- yup FNMA JPS and FMCC JPS

so these banks were big buyers of that paper and sometimes had 30-40 percent of reserves in those names

AND -- PAULSON was asked about this HIT ---- when he destroyed the PPS of F and F ----. He answered - he understood the issue and it would be handled bank by bank. End result - they got screwed big time (and who was in charge of FDIC at that time?)