| S & P Gives Fannie and Freddie a Negative Outlook |
| Written by Adam Silverman |
| Sunday, 24 April 2011 20:15 |
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S&P has downgraded its outlook for Fannie and Freddie from AAA stable to AAA negative. It maintained the AAA rating for them even during the housing crisis because their bonds are guaranteed by the U.S. Government. Good thing because the Goverment stood by to give them as much money as they needed to cover losses. Had they been stand-alone businesses, they would have gone bankrupt long ago..
Remember, Fannie and Freddie are GSE's, which means that if the US government is downgraded, they will also be downgraded as well. In fact, they were downgraded from stable to negative because the US government was first. S&P has threatened to lower the US government rating if it doesn't decide on a budget plan by the 2012 elections.
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