Fed Denies Talks with Fannie and Freddie about Discount Window

According to Bloomberg, the Fed just came out (after the close of trading of course) and denied that they had talks with Fannie and Freddie regarding opening the discount window for their use.

Reuters had a story in the afternoon to that effect, which sparked a sharp short-covering rally in Fannie and Freddie.

Personally we thought that they already had access to the Discount Window, considering who is bellying up to that bar already. If investment banks and Countrywide Financial, why not mortgage lenders?

But it just goes to show how these markets are. Today was some vicious trading, strictly a double black diamond slope. We loved it, but its really not a fruitful activity for the real economy.