Moody’s cuts Fannies rating
k harris comment lifted directly from comments cactus style:
Moody’s has cut Fannies financial strength rating to B from B+, but affirmed its debt rating at Aaa. Rationale? Fannie is at considerable risk of needing help in avoiding default, but the help is going to come, just going to, so that the risk of actual default is too low to contemplate.
Moody’s is implying that moral hazard is part of Fannie’s business plan and that we (as either stock holders, tax payers, or both) are on the hook for the risk.