Central Banks and Agencies - John Jansen -  I wrote a lengthy piece yesterday about the diminished bid for agency paper in the Central Bank Community. Brad Setser posed the pertinent question and wanted to know where the money that was not being spent in agencies was being invested. - Across the Curve

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HOW LOW BEFORE HOUSING GOES?  - looks at optimism vs doom and gloom - Stocks and Bonds

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Memo to the President-Elect; How Much Capital Does a Bank Need? - … Once the GSEs are safely under a conservatorship, with a program in place to slowly run-off the retained portfolios as the debt supporting them matures, then we can start focusing on the next task, namely fixing the securitization markets and recapitalizing the commercial banks. As you’ve read in this space previously, banks are GSEs too, just more competitive and focused on providing primary market finance to the private economy as opposed to the secondary, after-market function performed by FNM and FRE.  … - Institutional Risk Analyst

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FT Editorial - No more need for Freddie and Fannie - FT.co