Taiwan Dumps Fannie, Freddie. And Uncle Sam? – Barrons.com
by Tom on October 24, 2008
in Market Musings
Taiwan’s financial regulators reportedly have ordered that nation’s insurance companies to pare their holdings of the debt and mortgage-backed securities of Fannie Mae (ticker: FNM), Freddie Mac (FRE) and Ginnie Mae securities, according to a report on the Internet site of Asian Investor magazine.
via Taiwan Dumps Fannie, Freddie. And Uncle Sam? – Barrons.com
This could prove to be very troubling for borrowers in the United States. If this is the start of foreign governments refusals to buy our debt, we could really see a significant jump upward in mortgage rates.
Stay tuned…..
Tom
The USA has just become a subprime borrower. Since there is no difference in the full faith and credit between government backed mortgages and US Treasuries, this is more than a financial portfolio adjustment.
Perhaps this is an indication that Taiwan feels that we will not honor our treaty to protect them against the ChiComs.