Catalyst for failure

There are plenty of people that think Freddie Mac and Fannie Mae are both in trouble. They seem to be continually hiding something and just today one of them is once again looking for a new CEO.

The catalyst for their failure is interest rates. If they move up to fast, they could be in deep trouble as they have to cover their duration gap which will send interest rates up even further. This could lead to a spike in interest rates. This will cause the housing bubble to burst and create a huge problem for the economy.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s