January 19, 2008 – 6:36 pm

While everyone else worries about Freddie Mac and Fannie Mae, another GSE (Governement Sponsored Enterprise) is an adavanced state of deterioration. The Federal Home Loan Bank of Chicago canceled 3Q dividend payments to members. Many members are locked in with their membership deposit accounts to receive some nice benefits.

At this point in time, the Fed better nudge the FHLB of Dallas to merge with the FHLB of Chicago. Things will get worse with the Federal Home Loan Banks… This is why banks are not using the Discount Window… Once the banks milk the FHLB’s like an ATM machine, they will begin using the Discount Window in droves.

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