As leveraged assets go down in value, the leverage multiples go up. Adding to that multiple is the falling dollar and the fact that these assets are in reality debt deposits, not cash deposits, that were passed on in different forms to be leveraged over and over.
Toddo explains no news is bad news for government-sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE). The inherent risk of moral hazard: Once it starts, it's hard to stop.
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