Saturday, September 06, 2008

Government nears bailout of Fannie Mae and Freddie Mac

We're finally hearing the news that everyone knew was coming.

The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives and prop them up financially, federal officials told the two companies yesterday, according to three sources familiar with the conversations.

No surprise. I'm sure that there are those who will oppose government intervention in the market out of habit, but at this point most financial analysts are saying this is the only way out of the subprime mess. However, with the economy weakening in so many ways, there is no simple solution, and this takeover won't do anything except stabilize the mortgage lending market when it reaches bottom.

Just my opininon but I think there should be some far-reaching rescue package for homeowners too. After all, if people hadn't lost their homes to begin with, we wouldn't be seeing half the problems that we are.

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