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Geithner: Fannie, Freddie Debt Isn’t Sovereign Debt

These comments didn't seem to get much air play this week, but its worth reading if your into following the government debt trail.

http://blogs.wsj.com/economics/2010/04/02/geithner-fannie-freddie-debt-i...

Geithner's statement is nothing more than politics at its best. Geithner wants Freddie/Fannie to be secured by the explicit backing of the U.S. taxpayer, but at the same time this isn't the same as "sovereign" debt. The point is huge given the economic acrobatics the current administration has gone through to show they are somehow reducing the deficit. Putting Fannie/Freddie in the liabilities column (like they should be under proper accounting procedures) would give a more realistic view of how bad the Fed's books are way in the red.

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