OK, so it’s ‘007 Year of the Bond, not to mention The Year of the Pig, but do the GSEs really have superpowers? [1] What we do know is that the situation in subprime is calling for a superhero, and when a Fed Governor minimizes the problem [2] you know her minimal problem is significant. So it was timely earlier this month when Freddie Mac CEO Richard Syron showed up with a phone booth under one arm and a change of clothes under the other. His message? If Congress and the Administration let Fannie and Freddie loose, they can help stabilize mortgage finance against the problems coming out of the weak sub-sector.
