Fannie and Freddie nationalised – let’s take over the rest The Financial Times has hailed the effective takeover of Fannie Mae and Freddie Mac by the US government as “what could become the world’s biggest ever financial bail-out.” Treasury secretary Henry Paulson has promised he will pump in ‘unlimited liquidity.’ Don’t you wish the government would grant you unlimited liquidity? When it comes to the food and fuel bills of the poor and the working class, the British and American governments find that the cupboard is bare. But now it’s not bare. Predictably markets all over the world have breathed a sigh of relief. Fannie and Freddie have effectively been nationalised – and big business thoroughly approves!
Why you should worry about Fannie and Freddie Fannie Mae and Freddie Mac may sound like two characters out of the old West, but Fannie Mae is the Federal National Mortgage Association and Freddie Mac is the Federal Home Mortgage Corporation and they're both in big trouble. The big two have liabilities of $5.3trillion outstanding. This is as big as the entire US national debt, which has ballooned under Bush's stewardship.
Hedge funds, speculation and capitalism Hedge funds are in the news again. They don't much like being in the public gaze. We wonder why. Does their speculation cause prices to go up? Do they drive firms into bankruptcy so workers lose their jobs? These are the questions being asked. Let's see what they get up to.
