“… both the Fed and the government are afraid that they might have to make good on a guarantee that doesn’t exist.”
On April 13, 2005, Toronto Globe and Mail technology reporter Mathew Ingram used those words to close his story “Don’t be fooled by the cute names: U.S. Treasury Secretary John Snow is worried by the size of GSE retained portfolios”. Fifteen months later the US has a new Fed chairman and a new Treasury Secretary, but the words still ring true. Only now the risk is immediate.
