Tuesday, September 23, 2008

The real purpose behind the FNM and FRE takeovers

Is the same as Paulson's ambitious goal in buying up 700B of debt. Even if the Government buys it at "fair value",the successor administration is locked into a tight monetary policy because monetary policy will determine the profitability of the portfolios. What Paulson is primarily concerned about protecting his 500M from inflation, not protecting the financial system.

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