Two-Tier Transparency Hits Agency Debt Market

I don't think anything straightforward has happened on this story arc in almost two years. The GSEs themselves have been quasi-nationalized. Their debt now enjoys a semi-explicit guarantee, so that when the Chairman of the House Banking Committee suggests that bondholders may have to take a haircut anyway spreads tighten to a multi-year record, which is just a bit counter-intuitive.

Meanwhile Treasury apparently can't legally offer support to the debt, but what they can do is offer the Enterprises unlimited support to some classes of their equity until the end of '12, which is conveniently after the next presidential election so their next move won't have to take into account, like voters … but heck, it's a totally risk free strategy. Why? Because they won't have to actually do anything more until 10 days after the world ends on Dec 21st