S&P Cuts Fannie, Freddie, FHLB, Farm Credit Outlooks After US Cut

The Wall Street Journal reports:

Standard & Poor's Ratings Services cut its outlooks on Fannie Mae (FNMA), Freddie Mac (FMCC), the Federal Home Loan Bank system and the Farm Credit System in correlation with its recent move of lowering its outlook on U.S. debt.

S&P said the outlook changes reflect its revision of the outlook on the U.S. from stable to negative--a move S&P made Monday that roiled markets.

"Per our government-related entity criteria, the ratings on the GREs...are constrained by the long-term sovereign rating on the U.S.," S&P said. "We derive our opinion of the support included in the ratings based on the links and roles attached to the supporting entity, the U.S. government."

Just another reason to snuff out the GSEs.