US Government stages world's biggest bail out

By Harry Wallop in London and James Quinn in New York

Last Updated: 8:55pm BST 07/09/2008

The world's biggest financial bail-out was staged by the American government in a bid to ease the global credit crisis.


	US Treasury Secretary Hank Paulson and FHFA chief Jim Lockhart

The country's two biggest mortgage companies were nationalised amid fears that their bankruptcy would have triggered an economic collapse.

The multibillion-dollar rescue of Fannie Mae and Freddie Mac - dwarfing the UK nationalisation of Northern Rock - will be funded by the American taxpayer.

It represents a potential liability of £2,900 billion. The move was welcomed by mortgage experts in the UK, who said it should inject some confidence into the British housing market, which is suffering from the steepest fall in prices since the 1930s.

lazen

Activist

Posts:326

08/09/2008 6:43 AM	Alert
Yeah we heard. All the top execs at FM and FM got sacked. Taken over by The Govt. It wont do much good though. You cant lend money to people who cant afford to pay it back

james armstrong

First Timer

Posts:5

09/09/2008 7:05 AM	Alert
the real housing crisis is not in U.S. but in U.K. The Economist this week gets it right. I conclude there is no effective 'market' for houses when 1.7million households (say 2.5 million people )are not catered for by the existing arrangements. From The Economist, September 6th 2008 "Estate Management Labour first turned its attention to improving the condition of existing social housing pouring £20billion into refurbishment in its first decade in office. Now it is increasing the quantity: The aim is to build 20,000 homes in 2010 and more in future years. (This week's announcement included a promise to bring forward some of this building work.) It has also tightened up the right-to-buy scheme, capping the discounts that tenants are entitled to, in order to prevent more stock slipping away. Last year was the first time since 1983 that more social housing was built than sold. Still, an acute shortage remains: 1.7m households are on the waiting list for council housing and 87.000 of them are in temporary accomodation, which is disruptive of families, and expensive for councils. Housing benefit, claimed by 4m households and worth £71 per week on average, helps relieve the shortage. "

lazen

Activist

Posts:326

20/09/2008 11:17 AM	Alert
The crisis is in 2 parts: 1)Those who bought and are now short changed(as they see it) 2)Those who never got on but would like to if its cheap enough. Who will "win"? No body most likley if prices fall to "just"£30-40,000 . Satanic sytems cannot come good

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