An explicit guarantee for GSE agency paper was not a legal or financial fact. There was no guarantee pre-conservatorship.
Anyone with a working, awake brain and financial knowledge could determine that since on every MBS offering and prospectus it was clearly stated and printed that the US Government does not guarantee payment. There was no guarantee given by the US Government.
However, one cannot easily prevent people from holding ill-informed beliefs and opinions or correct erroneous perceptions. Those that you say had 101% clarity and certainty were unknowing believers in a non-existent actuality before the financial collapse.
So even though there was the financial fact of no US Government guarantee whatsoever, and that GSE MBS were not debt like US Treasuries, that fact did not prevent herds of investors from blindly believing in an wholly imagined MBS guarantee supposedly backed by the full faith and credit of the US federal government. The infamous implicit guarantee.
An implicit guarantee is an imagined guarantee in actuality and therefore could it could be no more than an investor bet that the US Government would not allow MBS investors to hold an empty bag if financial conditions went south.
The bet turned out well for most MBS investors, especially those in China and Russia and elsewhere, that were kept alive by the bailouts and conservatorships conducted in order to prevent ramified financial collapse and rebound.
But, it did not work out well for those stockholders dreaming of a guarantee, implicit or otherwise, that never existed for their pension, insurance, retirement , mutual fund, etc. holdings. These were wiped out with billions of dollars in value gone.
The MBS investment gambles that went on and on backed by shaky and shadow CDS plus the practice of imagination peppered with dreams of green, were also an engine driving the financial collapse.
This is one reason why today there is so much legislative concern about making a US Government guarantee explicit or having none at all.
News 
Market Data 
Discover 
