Posted on 07/20/2008 9:59:25 PM PDT by Fred
NEW DELHI: For more than a decade, Fannie Mae and Freddie Mac, the housing giants that make the American mortgage market run, have attracted overseas investors with a simple pitch: The securities they issue are just as good as the U.S. government's - and they usually pay better.
The marketing plan worked: About one-fifth of securities issued by Fannie, Freddie and a handful of much smaller quasi-government agencies, some $1.5 trillion worth, were held by foreign investors at the end of March. One-tenth of all American mortgages are, in effect, in the hands of institutions and governments outside the United States.
Now that the two companies are at risk, these foreign holders are watching closely to determine the future of hundreds of billions of dollars of investments. How Fannie and Freddie's rescue is handled will ultimately test the world's faith in U.S. markets and could influence the level of interest rates and weigh on the strength of the dollar for years to come, analysts say.
"No less than the international perception of the credit quality of the U.S. government is at stake," said Richard Hofmann, an analyst with Credit Sights, an independent research house with offices in London and New York.
Also at stake is the ability of Americans to access credit in the future. If foreign companies and governments abandon these investments, home, auto and credit card loans will be much more difficult to come by.
(Excerpt) Read more at iht.com ...
The problem with a free market, is that it doesn’t necessarily do what’s best for a country.
They needn’t worry. According to liberals, we can’t “drill our way out” of an oil crisis, but we sure as hell can *print* our way out of any money crises....
These are free traitors are at work...They will tell you that they are just doin' their thing, but they are ruining our country. True capitalism should have consideration for national interests and morality. Anything less is crapitalism.
Liberals such as Al Gore also apparently think they can blow their way out of the crisis with wind power. Sorry Liberals, but no matter how good you think you are at it, there are just some things that you simply will not be able to blow your way out of.
There was a real comical moment during the recent takeover of IndyMac by the Feds. One of the Federal Spokesman actually got in front of a camera and stated that IndyMac was now as reliable as the Federal Government. What a laugher that was.
They should only give MBA's to students who will swear an oath that they truly believe what you just wrote. This train wreck that is our economy has been heading towards us for many years now.
And this is why America's credit rating is on the line. Will you default like Argentina and Russia, or are you good for it?
I think you're good for it.
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