It's Not Sovereign Debt -- Really

As I discussed last week, I don't like the idea of finding “implicit guarantees” in contracts between sophisticated parties.  Nonetheless, I was happy to hear that Treasury Secretary Timothy Geithner today stated specifically that Fannie Mae and Freddie Mac should not be considered “sovereign debt.” 

The Wall Street Journal Blog reports that Secretary Geithner and other administration officials are seeking to get their financial regulation reform legislation through Congress before deciding what to do with the two mortgage finance institutions.  I can’t help but wonder if his statements today might be a little foreshadowing. Of what, though, I have no idea.  

--Josh Fershee