The biggest foreclosure bailout of all ...

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A quickie: Calculated Risk highlights St. Louis Fed President William Poole’s worries that Fannie Mae and Freddie Mac are headed for trouble.

Poole: ‘I do not have any information on the GSEs [government-sponsored enterprises] that the market does not also have. Nevertheless, in assessing the risk of further credit disruptions this year,

I would put the GSEs at the top of my list of sources of potentially serious problems.’

Reality check:

Fannie and Freddie reported combined losses of $6 billion in the fourth quarter.

And what happens if Freddie and Fannie get in deep trouble? Poole predicts a bailout: ‘... unfortunately, the GSEs probably can expect targeted aid. ... the GSEs ... might get assistance directly from Congress ... .’

This is a fair question for presidential candidates: Do you believe there is an implicit government guarantee standing behind Freddie and Fannie? That is, will you support a bailout if they get in trouble?

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Photo credit: Bloomberg News