Fannie and Freddie Fallout: What the Experts Say
As shares of Fannie Mae and Freddie Mac ,continue to drop Friday, concerns are being raised about capital constraints, interest rates and a possible government takeover.
Could a collapse of these mortgage giants may set off more fallout in the housing market and add another kick to the already down dollar?
Here's what experts and commentators are saying on CNBC ...
Capital May Offer Comfort to Debt Investors
"On the debt side, an ongoing concern that is really what the government and regulators are looking at, is really whether or not they can fund the discount notes. [Raising capital] is something that really helps with that and really should give debt investors a lot of comfort."
-Ira Jersey, U.S. interest rate strategist at Credit Suisse
Time to Get Rid of Fan and Fred?
"If you want to get rid of them let's do it in an orderly fashion. I agree with Sean, you start downsizing them and then we can disagree on how far downsized they have to be, getting rid of them being the limit of downsizing."
-Jerry O'Driscoll, of the Cato Institute
Home Owners Can Relax, Share Holders May Not
"All this panic about Freddie Mac and Fannie Mae not being able to meet their obligations is silly. The federal government simply cannot afford to let them fail. They were created by the federal government to make it possible for people to own homes and I think Americans can remain confident that that facility will remain in place."
-Peter Morici University of Maryland School of Business
The Optimistic Outlook
"The key point right now with Fannie and Freddie is at the increment on transactions being done now... Their spread, now this is my guess work because their report hasn't come out yet... the difference between there costed funds and what they make on their investments, I believe, is at modern day record on the upside."
-Dan Fuss, Loomis Sayles vice chairman/portfolio manager