Links for Saturday, July 12, 2008

• Bill Burnham: Fannie Mae’s Golden Goose: A Lesson In Moral Hazard – “*Beneath the seeming calm, the seeds for Fannie’s distress were now firmly planted. Fannie’s drive to lower underwriting standards had created a pool of mortgage debt with a much higher level of embedded moral hazard risk as well as good old fashioned credit risk. Fannie’s purchases of mortgage securities were so large that it was getting increasingly difficult to feed the golden goose enough food. *“