Swimming with the Razorfishes

Sunday, September 07, 2008

Fanny

FHFA statement (via Ofheo's site) regarding putting Fanny and Freddie into conservatorship. [update: details from Treasuy]

Some interesting points:

  • Herb Allison and David Moffett will be CEOs of Fannie and Freddie, respectively.
  • All common and preferred stock will remain outstanding, but dividends will be eliminated.
  • The U.S. government will obviously be guaranteeing debt.
  • Political activities, including lobbying, will stop immediately.

Secretary Paulson will announce the details of the plan, but it appears to be a federally-backed backstop for Fannie and Freddie, allowing them to continue operation and hopefully reducing their borrowing costs.

Big stuff.

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