Fannie Mae Preferred S (FNMAS)

[jwnoble3]

TSY and the FED are going to have a great deal of say in what happens to the GSEs...

For those who are interested. Good reading for a peek into the Feds playbook (Bernanke authored). This is part of the reason the MBS purchases have been so large in a non-conventional policy mode by our Fed. I suspect Yellen will follow closely as well.

http://www.federalreserve.gov/Pubs/FEDS/2004/200448/200448pap.pdf

It is a lengthy read, but well worth at least the salient points of what the economy is working through since 2007-2008. We are far from being in the clear.

My main point is that for the mechanics of QE to work the FED will need a Very large and VERY liquid MBS market to be in place.