Ryan A Graves.com

A summary of the governments bailout or takeover of Fannie Mae and Freddie Mac from Fred Wilson:

This means the US taxpayers are now the guarantors of many of the mortgages that have been issued in recent years. Nobody really knows how much liability that the government/us taxpayers have taken on, but it’s certainly a huge number, way more than the savings and loan bailout of the late 80s. ….. Some will argue that this is really good news, that this marks the bottom of the bear market in real estate and the final capitulation from which we can now start moving higher. I don’t think so. The small regional banks that the Fed’s been letting go under the past couple weeks will continue to go under and I think we’ve got at least another six months to a year of bad news in the real estate/mortgage business before it’s all over. ….. How does this impact startup land and venture capital? Well from my vantage point, we’ve been largely spared for the past year. And I think we’ll muddle through this period better than many other sectors. But the capital markets are a mess and we should not expect a rosy exit environment any time soon. And we should expect to continue to get bad news on fridays after the market closes for a little while longer too.