Fannie and Freddie

At the beginning of this year, the basic plan among the big banks was to package off as much loan as possible and ship them off to Fannie and Freddie so as to increase internal liquidity.

It didn't exactly pan out that way.

Fannie and Freddie (and to a far less extent the VA) was seen as the last line of defense for the finance industry- they have far more stringent underwriting guidelines, and they weren't as knee-deep in really crazy loans. But of course as we know now, they were not immune to the housing/credit bubble.

This underscores again just how tough this year has been for the financial sector.

Will this increase liquidity in the aggregate sense? Off the top of my head my guess is not much, but we'll see..