by Calculated Risk on 7/15/2008 11:40:00 AM

From MarketWatch: Paulson: Fannie, Freddie don't plan to use U.S. backstop

Troubled mortgage-finance giants Fannie Mae aren't planning to use a U.S. government backstop now, Treasury Secretary Henry Paulson told members of a Senate panel Tuesday.

"Now" is the key word. How about tomorrow, or maybe next week?

In the very short term, before congressional approval of the Paulson Plan, the only portion of the rescue plan that is operative is that Fannie and Freddie can borrow from the NY Fed. And this probably isn't needed because the Fannie and Freddie problems don't appear to be a short term liquidity issue.