President Obama gave a speech on winding down Freddie Mac and Fannie Mae, the GSEs often blamed for the housing crisis and a darling of conservative ire. Government sponsored enterprises, or GSEs buy up mortgages from private lenders and the theory is to loosen up funds to stir additional lending.
I know we all believe the housing bubble has already popped and all things real estate are over. One might think this post should be from 2006 from the title. But it's not, this post is from 2010 and below are the reasons for the question.
Eventually the unsustainable will end. It's an immutable law of both physics and economics. For the American dollar, it appears that this day of reckoning is approaching quickly.
Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.
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