The U.S. Government finally decided to take over the 2 mortgage giants Fannie Mae and Freddie Mac. Details were announced over the weekend by the US Treasury: $200 Billion in new capital plus credit lines would be made available. The more shocking news were that the two companies would be put under management of the Federal Housing Finance Agency.
This injection has brought liquidity to the markets. So far U.S. bond yields and Asian Markets have shown a good recovery. The US government stands in awe of further risks for the markets and is willing to move into any action. If the plan can make the mortgage lower effectively and contribute to price stability, that would have a great impact on the U.S. housing market.
Official information in The United States Department of the Treasury website.
KEY POINTS (Thomson Financial News):
- · The regulator of the two companies, the Federal Housing Finance Agency (FHFA) will manage the two companies on a temporary basis.
- · U.S. establishes preferred stock purchase agreements to insure each GSE retains positive net worth.
- · Treasury's Paulson told regulators wouldn't commit taxpayers funds to GSEs without conservatorship.
- · Treasury establishing secured lending credit facility for Fannie, Freddie, Home Loan Banks.
- · Treasury to begin buying Fannie, Freddie MBS later this month under temporary program.
- · Herb Allison to be new CEO of Fannie, David Moffett CEO of Freddie.
In-Depth Analysis
- · Daily Radio Show - Revenge of the Sith Part 2...Fannie and Freddie by Rob Booker
- · Daily Market Briefing - US Dollar Gets a Boost from Fannie/Freddie Intervention...For Now by FXCM
- · Daily Global Commentary - The Long and Short of the Fannie Mae and Freddie Mac Rescue by Northern Trust
- · Why The Fannie-Freddie Bailout Will Fail by Money and Markets
- · Forex Trading Strategies - US Treasury Nationalization of Fannie and Freddie finally halts USD charge by Saxo Bank
- · Research US - Fannie and Freddie rescue, version 2.0 by Danske Bank
Related News
- · France's Lagarde welcomes Fannie, Freddie bailout (Thomson Financial News)
- · Fannie, Freddie need restructuring to limit risks-IMF (Thomson Financial News)
- · McCain, Palin urge Fannie, Freddie restructuring (Thomson Financial News)
- · China central bank says US takeover of Fannie, Freddie to stabilize market (Thomson Financial News)
- · BIS-US move on Freddie and Fannie is welcome-Trichet (Thomson Financial News)
- · Freddie, Fannie plan protects US taxpayers-Paulson (Thomson Financial News)
- · Dollar rises, yen slides on Freddie, Fannie news (Thomson Financial News)
- · BOJ Governor: Welcomes US Government Fannie, Freddie Takeover (Dow Jones)
- · EURO GOVT-Bunds sag as stocks surge on Fannie, Freddie (Thomson Financial News)
- · JGBs tumble as Treasuries hit by Fannie, Freddie takeover (Thomson Financial News)
- · Dollar dips vs euro after Freddie, Fannie bailout (Thomson Financial News)
- · BOK:US Bailout For Freddie,Fannie Having Good Impact On Korea (Dow Jones)
- · JGB futures hit as Treasuries fall on Fannie, Freddie (Thomson Financial News)
- · Yen slides as Freddie, Fannie bailout calms nerves (Thomson Financial News)
- · Fannie, Freddie should be privatized: McCain adviser (Thomson Financial News)
- · Obama: intervention of US housing lenders necessary (Thomson Financial News)
- · Freddie Mac has no comment on US Treasury takeover (Thomson Financial News)
- · US Treasury to purchase $5 bln in Fannie, Freddie MBS (Thomson Financial News)
Blogs
- · 1st on Forex - Scheduled Events Calendar for September 8 - 12:Another Week- Another Hurricane by Jerry Furst
More Info:
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a government sponsored enterprise (GSE) of the United States federal government. It is a shareholder-owned corporation authorized to make loans and loan guarantees.The Federal Home Loan Mortgage Corporation ("FHLMC"), commonly known as Freddie Mac, is also an US GSE. It is a stockholder-owned corporation authorized to make loans and loan guarantees. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US.
