For those who may have missed it, there was a notable development on December 24 concerning Fannie Mae and Freddie Mac. Here is The Wall Street Journal link and the Treasury Dept link:
Basically the government announced plans to cover an unlimited amount of losses at both companies.
It is yet another testament to the extent of intervention in the real estate markets.
I think this “blank check” approach carries many risks. A while back I wrote an article about how interventions could be effectively managed. The article is not intended to condone or support the concept of interventions. However, there should be a regimented approach to their administration. These interventions carry a tremendous amount of risk, aside from the substantial amounts of money being expended. Here is the link (it is also listed among the articles on the right-hand side of the home page):
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SPX at 1126.48 as this post is written