A week or so ago I put up a link to John Hempton’s initial analysis of Fannie and Freddie. At that time I said it was to be a four part series and John commented to me that it would likely be longer than that.

Indeed, he is now up to six separate posts on the subject of the twins future. They really are quite brilliantly done and well worth reading. The surprising conclusion is that both have the potential to earn their way out of their current predicament and become viable entities once again.

John offers some ideas from an investment perspective for taking advantage of this eventuality and points out the obvious risks as well. This is not the last in his series on the GSE’s but it at least includes his conclusions as well as a meticulous discussion of the methodology he used to arrive at those conclusions.

I strongly recommend that you read all six. Hempton is a good writer and translates a complex subject into a highly readable form. His conclusions have a number of important policy implications and if you throw in with his analysis might also make you some change.

Here are the links. I recommend you start with Post 1 and proceed from there. l ll lll lV V Vl