Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

Good commentary by Doug Noland dated 10-21-2001 where he speaks of GSE's and FNM (last third of the essay).

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=...

Everything I read doesn't say that the government specifically guarantee's GSE's. It appears that it is more an expectation based on securing our economic system, or bailout in other words. The point I'm making is that if we get to that point where it becomes essential for the government to step in, under the current political environment I think that we may see some hesitation to do so. If we get to that point our problems will be much deeper than who is going to guarantee those bonds. It could get to a point where it's either feed the poor and house the homeless or payoff some "rich guy" for an investment gone bad.

Does anyone know for fact that the government is legally obligated to back GSE's?

Joe