US two houses retreat Chinese assets

In Friday, the Treasury Department unveiled a white paper on the U.S. housing finance market and Fannie Mae and Freddie Mac, which will pass three major reforms to reduce the government's role in the housing mortgage market. A move, immediately on the other side of the ocean to arouse the thousand waves. As the main overseas holders of the two-room bond, many people are beginning to worry about whether the bonds held by China will be affected.　　Several experts, including former Fannie Mae's chief credit officer and senior researcher Pinto of the American Entrepreneur Institute, also told the first financial daily that they had no need to worry or rush to sell "Fannie and Freddie" bonds.　　In addition, the State administration of foreign exchange ("FX Bureau") in Friday also denied reports that China or the investment in "two-room" debt faced huge losses. "Two rooms" exit a long and gradual way the three reform options include: The government, in addition to retaining the existing Federal Housing Authority, has completely withdrawn from the housing mortgage market; second, only in the housing market crisis, the government can come forward to guarantee housing mortgages; Third, the government still plays a certain role in the housing mortgage market　　, but will no longer be implemented by government-backed companies such as Fannie Mae and Freddie Mac, but by private insurers, where governments will not be able to play a role. The White paper notes that it will take 5-7 years or even longer for the government to withdraw its support from the mortgage market slowly. "The road is long and now it's just a start," Geithner said 11th in a press conference.　　"How many two-room bonds does China hold?" According to the US Treasury's website, the U.S. government's long-term institutional bond (Agency Bonds) is $454 billion trillion, of which 358 billion U.S. dollars is "asset backed securities" (ABS), as of June 2009. Other institutional bonds are 96 billion dollars.　　The data do not include purchases by special agencies in Hong Kong and other parts of China. According to the website's monthly data on China's "buy" and "sell" US institutional bonds, the Chinese have been doing a net sale of us institutional securities since July 2008 (except for net purchases from March 2010 to July) to November 2010. Net sales amounted to $81 billion trillion, an average of $2.8 billion a month.　　But the data do not include bond transactions with other countries. It is noteworthy that in September, when the two houses were retired in June 2010, China's single-month net-selling bonds set a record high of $26.3 billion trillion.　　China bought $4.5 billion trillion in institutional bonds in September, and sold bonds as high as $30.8 billion trillion, the highest ever sold. These holdings could include "two-room" bonds and securities, as well as other U.S. government agency bonds,For example, the Government National Mortgage Association (Ginnie Mae, Geely) bonds. The U.S. government has pledged to ensure that the creditors ' interest in the foreign exchange bureau said in a statement in Friday that as of now, the "two-room" bonds held by China's foreign exchange reserves are normal, and the average annual investment yield of "two-room" bonds is around 6% between 2008 and 2010 three.　　China has never invested in "two-room" stocks, the "two-room" share price has fallen and the stock-picking card has not caused losses to China. In fact, the U.S. government has made it clear in the white paper that "when the market improves and the Fannie and Freddie closures are closed, it should be clear that the Government is committed to ensuring that Fannie Mae has enough capital to meet any current or future guarantees and to be able to afford any debt liability."　　"It is noteworthy that in December 2009 the US Treasury amended the" Fannie and Freddie "preferred purchase agreement (Preferred Stock Purchase Agreements,pspas) to remove the cap on government support for the next 3 years. U.S. Treasury Secretary Timothy Geithner said: "China does not have to worry that the ' two-room ' bonds that have been bought will be ' wasted ', and the U.S. government will ensure that the countries and institutions that buy the bonds get the relevant return on investment. Experts say there is no rush to sell "two-room" bonds at the Brookings Institution Seminar on "Restructuring of the American Mortgage market" held in Friday, experts told reporters that countries and institutions that invest in "two-room" bonds, including China, need not rush to sell "two-room" bonds,　　Because the core of the reform proposed by the US government today is only to establish a transitional framework for the government to eventually withdraw from the two houses. In an interview with Pinto, Mr Pinto pointed out that China's "two-room" bonds and value would not be affected by the recommendations of the Mortgage market reform report, because China holds mainly credit bonds (debenture) that the US government has promised to repay, more than "mortgage bonds "(mortgage-backed security). "These bonds were issued with the promise of the US government, so the holders of those credit bonds, including China, would not be affected by the changes in the two companies," he said. "Credit bonds, also known as unsecured bonds, refer to bonds issued without specific assets as collateral and by the credit of the issuing company."　　If the company goes bankrupt, the holder is entitled to claim proportional claims against other assets after the company has liquidated its interest in the particular security (specific interest). Housing mortgage Securities (mortgage-backed Security, MBS) is an asset-backed securities (ABS), whose cash flow to investors comes from the capital and interest generated by the pool of assets that comprise the home mortgage loan. And because these loans have bad debts canCan, once the payment defaults can not be recovered, the mortgage-backed securities can not be cashed, so the risk is higher. Douglas Elliott, a former managing director of JPMorgan Chase and an economist at the Brookings Institution, also told our correspondent that there was no theoretical basis for China's investment in China because of the possible collapse of the two houses. "China does not have to worry about the ' two-room ' bonds that have been bought ', ' as it did when the credit bonds were sold, and the U.S. government will ensure that the countries and institutions that buy the bonds get the relevant returns. "There is no need for China to rush to sell these ' two-room ' bonds. In particular, if the speculation is related to the credit for repaying the bonds, the government's credit will be fulfilled, so there is no rush to sell. "Elliot said.