Fannie Mae and Freddie Mac accounted for a record 76.1 percent of new mortgage-backed securities issuance in the fourth quarter of 2007, according to a report published Wednesday by Inside Mortgage Finance. The GSEs combined for 56.9 percent of all MBS issuances during 2007, up from 39.9 percent one year ago. IMF reports that the GSEs last enjoyed a dominant market position in MBS issuances in 2003, when the previous record of 70.4 percent was set. I’d expect you’ll see that share number climb even further during the first quarter of this year, if recent events are any indication. A few traders I’ve spoken with have suggested to me that “zero liquidity” has returned to the MBS market outside of GSE-backed issues, something that likely does not bode well for the nascent 2007 fourth quarter earnings season. Disclosure: The author owned no positions in FNM or FRE when this post was originally published.