[Fwd: Agencies Crisis]-Correction

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Correction:  The agnecies are Fannie Mai and Freddi Mac.  Ginni Mai is
government guaranteed.

HCKL

-------- Original Message --------
Subject: Agencies Crisis
Date: Mon, 10 Mar 2003 12:58:33 -0500
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: gang8@xxxxxxxxxxxxxxx,  pkt@xxxxxxxxxxxxxxxx,
a-list@xxxxxxxxxxxxxxxxxxx, "TheNewForum@xxxxxxxxxxxxxxx"
<TheNewForum@xxxxxxxxxxxxxxx>

St. Louis Federal Reserve President William
Poole said Fanny Mai and Ginni Mai may not be sufficiently capitalized
to weather a financial shock and pose a risk to the financial system and
U.S.economy.

Neither is backed by the credit of the U.S. government and they
"hold capital far below that required of regulated banking
institutions," Poole said in a speech to an Office of Federal
Housing Enterprise Oversight meeting. He added that the
government should make clear it doesn't back the firms.

This is related to the retirement of the long gov. bond and the the
attempt by some to use agencies to replace the role long gov bons play
in the credit market.  The Fed is serving notice that it does not stand
behind the agencies which are up to their necks with credit derivative
exposures to bypass capital requirements.

Henry C.K. Liu