This morning's Wall Street Journal includes a mind-blowing commentary on its editorial page, titled"Fannie Mae Enron?" It's about Fannie Mae and Freddie Mac, the two corporations that hold an exclusive mortgage-funding franchise from the Federal government. Here are a few of the"I bet you didn't know" facts:

Fannie and Freddie hold a combined outstanding debt of some $2.6 trillion, which is growing at an annual rate of 25%
Fannie Mae had a 60-to-1 debt/equity ratio in 2001, more than 5x greater than the average ratio for a commercial bank
At the end of 2000, these corporations had a combined derivative position of $780 billion, and they don't have to disclose the identity of the debtors
During the 2000 election cycle, their political contributions totaled $4 million (about double the amount that Enron spent)
In 2001 they spent $3.1 million to have their financial statements"independently" audited, while paying those same"independent" auditors $14.6 million in consulting fees.
Also, they hold the majority of home mortgages in the United States. Ultimately, holders of their fancy debt assume the risk of default by Fannie and Freddie, not to mention shareholders.

This month's issue of The Elliott Wave Financial Forecast has plenty to say about bonds, interest rates, the economy, and the debt bubble that Fannie and Freddie helped to create. Speaking of bubbles, most investors didn't think the big one in the stock market would burst either. Until it did.

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Da sollte man sich ab und zu mal die Charts von Fannie Mae & Freddie Mac anschauen. Denn wenn sich da Probleme anbahnen, zeigen das die Charts (siehe J.P.Morgan).


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