We see little of note in the GSEs’ earnings – same-old, same-old in that one-time events such as mark-to-market and settlements determine gain or loss.  However, same-old, same-old will get all too interesting if one-time events work against the GSEs or, still more worrisome, if credit or liquidity conditions worsen.  Capital is on its inexorable slide even as volumes rise – in short, we’ve very big conservatorships riding very small bikes on a roller-coaster.

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