THE US TREASURY will today announce a rescue of Fannie Mae and Freddie Mac, two giant American mortgage banks, in what is likely to be the biggest financial bail-out of recent history.
The move may trigger a bounce in global stock markets tomorrow. However, analysts warn that some of the uncertainties that plagued the markets last week, including worries over the duration of the credit crunch, will persist.
Henry Paulson, the US Treasury secretary, is believed to have told the chief executives of the two government-sponsored enterprises - Fannie Mae’s Daniel Mudd and Freddie Mac’s Richard Syron - that they will lose their jobs when the two firms, which control about 75% of the US mortgage market, are put into “conservatorship” today.
The boards of both Fannie Mae and Freddie Mac have been attempting to resist moves by the Treasury that would wipe out shareholders.
Paulson, however, is said to be keen to ensure any support for the companies comes at a price. The US government’s cash injection is expected to be between $15 billion (£8.5 billion) and $20 billion.
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Great isn't it?
You the taxpayer gives the US government your hard earned cash, $20 billion
They buy the mortgages on your house.
They now own your property and you paid them to do it.
When will you people wake up!
The move may trigger a bounce in global stock markets tomorrow. However, analysts warn that some of the uncertainties that plagued the markets last week, including worries over the duration of the credit crunch, will persist.
Henry Paulson, the US Treasury secretary, is believed to have told the chief executives of the two government-sponsored enterprises - Fannie Mae’s Daniel Mudd and Freddie Mac’s Richard Syron - that they will lose their jobs when the two firms, which control about 75% of the US mortgage market, are put into “conservatorship” today.
The boards of both Fannie Mae and Freddie Mac have been attempting to resist moves by the Treasury that would wipe out shareholders.
Paulson, however, is said to be keen to ensure any support for the companies comes at a price. The US government’s cash injection is expected to be between $15 billion (£8.5 billion) and $20 billion.
Read more...
Great isn't it?
You the taxpayer gives the US government your hard earned cash, $20 billion
They buy the mortgages on your house.
They now own your property and you paid them to do it.
When will you people wake up!
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