On 7 September 2008, the US Government in Washington announced that it will seize the overall control of the two finance companies that deal with mortgage. The two companies are Fannie Mae and Freddie Mac. It was seen to be a very aggressive move to help the already troubled US Housing Market and its economy.
Indeed, housing mortgages debt is a very threatening problem which is currently affecting the current market. It is a very critical move trying to save or ease the market. This move has evidently impressed upon the investors in the Government’s stances to help the US economy recover. According to reports, both companies have come to a total of US$1.6 trillion dollars in mortgage debts outstanding. This take over could be the largest financial bailout by the Government in US financial history.
The two mortgage giants come with hefty combined losses of nearly US$14 billion in the previous year on year report. This has incredibly put a large dent in the confidence of investors on whether the economy will ever recover.
Now that the move had taken its shape, futures of Wall Street are looking extremely bright as Asian Markets had put on an extremely strong stock markets recovery with Korean Market, KOSPI rallied by more than 5 percent and Straits Times Index rallied by a three digit margain of 122.82 or 4.77 percent. Asian markets, except for Shanghai Composite Index, were rushing to throw their money into stocks after the US Mortgage Bailout plan was released.
The above were all personal opinion and not at all an inducement to trade.