Now it is time for the shareholders to bear the losses; let public money only step in to keep senior obligations whole, if it steps in at all. (alephblog.com)
Thus, I argue that a guarantee of senior obligations of the GSEs would not be horrendously costly. (alephblog.com)
Even though asset portfolios are relatively high quality, they still take a decent amount of investment - grade credit risk, and even squeaky - clean portfolios like the one Safety has are exposed to Fannie and Freddie, unlikely as they are to default on senior obligations. (alephblog.com)