The quasi govt entities are difficult to read. They are publicly traded on the NYSE, so their shares are at risk – public exposure to any downturn.
They package and re-sell “some” of their loans (based on limits/regulation that may in the future further restrict their ultimate exposure) which are then re-packaged in MBS shuffling the securities around the globe and to other publicly traded financial institutions. More public exposure but much of it international? This may be a scary prospect as liquidity will be a concern as international interests elect to stay out or worse, pull out.
Somehow the USG may get involved to clear the deck as they did during the RTC debacle?
A lot of scrutiny right now in Fanny&Freddy. I intend to investigate to try and figure out this financial labyrinth, if it’s even possible…