Best Time to Bury a Story? X-Mas Eve
The U.S. Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years, effectively opening its checkbook to the government-controlled companies in a bid to reassure investors in their debt.
Treasury announced the moves in a Christmas Eve press release, a week before its authority to change the terms of its agreements with the companies was set to expire. After Dec. 31, Treasury would need the consent of Congress to make such changes.
–“U.S. Uncaps Support for Fannie, Freddie“; The Wall Street Journal (12/24/09)
What’s the significance of the foregoing?
Fannie Mae and Freddie Mac are the major suppliers of capital to the housing market at the moment.
The Treasury’s move indicates that it doesn’t plan to “cut off” either anytime soon, even after shoveling more than $100 billion into the firms since putting them into “conservatorship” in August, 2008.
The only thing surprising about the Treasury’s announcement is the Christmas Eve timing: apparently, no one’s working there at midnight tonight (an even better time to bury the news).