Turn on the news or the radio and you’ll be blasted with the news – the federal government has bailed out our friends (foes?) Fannie Mae and Freddie Mac. There’s no sense in me spending time discussing the events as they have been heavily covered by all media outlets.
No, today I want to look at what people are saying about what this means. So without further aideu, what’s the fallout from such a maneuver.
According to the LA Times: It “Doesn’t Change Anything”. Peter Viles implies that this just rescues these two groups and leaves many banks vulnerable as we wait to see who fails next.
early indications from overseas markets show that the move will be received very favorably. In fact, it could change the landscape in the financial markets. It’s far too early to say this out loud, so I’ll just whisper it very softly: there’s a possibility that we’re at the beginning of the end of the long credit crisis.
Bloomberg predicts lowered mortgage rates will probably result and that, “The federal bailout of the mortgage giants may temper the slide in home prices.”
The Telegraph in the UK notes how the US looks to be far more socialist with the revelation of the interrelationship between the state and financial institutions.
It seems everyone has a different take on the fallout or lack thereof to everyman/woman. Of course, the dollar rose, foreign markets and the US market saw gains so at least if our homes aren’t going to give us much value you might have made some gains on stock investments and on every dollar sitting in your account. But as far as tangible effects, we don’t see huge ones yet.