The Federal Reserve swept in to save gov-backed mortgage enterprises Fannie Mae and Freddie Mac from near-certain demise with a short-time plan: 1) Responding to recent fears that both companies might face a cash crisis due, in part, to rapidly tanking stocks, F&F will now be able to borrow liquidity from the Fed's "discount window" by posting their asset-backed securities as collateral. 2) The administration will also beg ask Congress to increase the federal line of credit to F&F, allowing them to secure cash money even more cheaply. Strap on your seat belts, folks. [Forbes]
Filed under: