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Thu, 17 Feb 2005
How to kill Fannie
Today--I thought we learned from the chairman how you you can steepen the curve and still bankrupt Fannie Mae. Just halt the growth in the portfolio so that Fannie is forced to mark the low coupon increasingly long duration mortgages to market in an increasingly high interest rate environment. Couple this with no growth in the portfolio of newer, higher yielding, securities and a slightly higher funds rate and presto ---- Insolvency.
Posted 10:38

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