2009-01-24 — ml-implode.com
"By virtue of its implicit government guarantee, Fannie and Freddie borrowed $4.5 trillion to create $4.5 trillion worth of loans. Assets = Liabilities + Equity. For Fan and Fred, Assets equaled Liabilities, so Equity was zero. With no equity in the equation, they had no cushion to protect against the declining value of their assets."
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