Biggest Bailout in US History- Gov’t takes control of Fannie and Freddie | Survival News Network

« Oil rises after inventory report U.S. stock futures jump on Fannie, Freddie seizure » Sep 07 2008 Biggest Bailout in US History- Gov’t takes control of Fannie and Freddie Posted by: in News Source: FT.com The US government on Sunday seized control of the troubled Fannie Mae and Freddie Mac mortgage groups in what could become the world’s biggest financial bail-out. The government’s move, its most dramatic since the start of the credit crisis, is aimed at ensuring the two groups’ woes do not cripple the country’s housing market or worsen to the point that they fail and send shockwaves through global markets. While the Bush administration stopped short of using the word “nationalisation”, analysts said the moves amounted to de facto government control if not full ownership. Fannie and Freddie have $5,400bn in outstanding liabilities and guarantee well over half of all US mortgages. “Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” said Hank Paulson, US Treasury secretary. In a sign of the magnitude of the decision, Mr Paulson briefed presidential contenders Barack Obama and John McCain, as well as President Bush and senior members of Congress ahead of the announcement. As regulators took charge of the companies, the government said it had agreed to inject up to $100bn in each of them as needed to ensure they meet their debts. In addition, it would start buying mortgages backed by these companies and extend an unlimited liquidity facility to them until the end of next year. The chief executives of both groups are to leave under the new arrangement though both have agreed to stay on to oversee the transition. Shares in the two companies will continue to trade but shareholders face the prospect of massive dilution. Bondholders would have their assets underpinned by the US government support. Full Story… Related Blogs Related Blogs on Fannie Mae Record breaking bailout of Freddie Mac and Fannie Mae Obama and McCain on Freddie Mac and Fannie Mae Rescue How do Fannie Mae make their money? Why are they in such a bad … Related Blogs on Freddie Mac Record breaking bailout of Freddie Mac and Fannie Mae Obama and McCain on Freddie Mac and Fannie Mae Rescue This entry was posted on Sunday, September 7th, 2008 at 6:53 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed. Leave a Reply Name (required) E-mail (will not be published) (required) Website	Portable Solar Electronics Charger - 17-0340
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