Fannie and Freddie

I woke up at 6 am to pack up for a trip to Lake Louise (we are currently in BC) and my husband ran upstairs yelling, "Honey, you had the call." He predicted years ago that GM was going to go in to bankruptcy, and I had basically the same call for these Fannie and Freddie. As a mortgage backed bond trader I understood their business, and though a great business when times were good, there was simply no way to hedge the risks if the housing market were to turn, and turn it did. A government bailout is inevitable. I have not yet called around to see where mortgages are trading, or agency debt, or or..... but as I have said many times over on this blog, this is not over.