December 2, 2008 8:03:15 PM CST
(Newser) – A global storm continues to threaten the world’s economies, and the US government takeover of Fannie Mae and Freddie Mac is just one step, albeit a major one, toward recovery. Whether the latest attempt to right the ship succeeds "ultimately boils down to two big issues," writes Mohamed El-Erian in the Financial Times. Underlying both is the reality of globalization.
Washington must do all it can to attract both domestic and international investment, allaying the fears of "foreign holders of US debt who have become increasingly skittish in recent weeks," writes El-Erain. And economic policymakers must stop planning ad hoc and learn from, of all entities, the countries that have recently coped with weather disasters, which understand "the importance of a holistic response from the authorities."
Source Financial Times (UK)
Nov 20, 08 4:38 PM CST Homeowners facing foreclosure got a morsel of good news today: Fannie Mae and Freddie Mac won’t give them the boot over the holidays. The companies will suspend foreclosures of occupied houses from Nov. 26-Jan. 9 while they work out a loan-reform plan with lenders, MarketWatch reports. The six-week suspension should keep 16,000 homeowners safe for the time being. More »
Nov 14, 08 8:35 AM CST Freddie Mac, the swamped mortgage giant seized by the government two months ago, asked for $13.8 billion from the Treasury today after a record quarterly loss plunged its net worth into the negative, Bloomberg reports. Sister company Fannie Mae, also under government control, said this week it might need funds beyond the $100 billion previously earmarked for each of the firms before the end of the year. More »
Nov 11, 08 12:07 PM CST Officials from several US banking regulators are finalizing guidelines for financial firms that will encourage them to lend more and curb executive pay, the Washington Post reports. The Treasury is taking $250 billion in equity stakes in various financial firms, but critics complain the firms are passing the taxpayer money along as shareholder dividends, paying top officers, or acquiring rivals rather than lending the money as intended. More »
Nov 11, 08 10:37 AM CST Fannie Mae and Freddie Mac will roll out a plan today to modify hundreds of thousands of loans in an effort to prevent foreclosures, the Wall Street Journal reports. The mortgage giants, under federal conservatorship, aim to reduce mortgage payments to no more than 38% of household income. Private banks will be encouraged by the Treasury to perform similar surgeries. More »
Nov 11, 08 7:31 AM CST Citigroup will modify up to $20 billion in mortgages for borrowers current on their payments but at risk of falling behind, the bank announced this morning, mirroring similar moves by Bank of America and JPMorgan Chase. Citi will reach out to half a million borrowers, ultimately reducing monthly payments for 130,000 whose payments exceed an average of 40% of income, Wall Street Journal reports. More »
Financial Crisis • bailout • Bush administration • subprime crisis • Fannie Mae • Freddie Mac • credit market chaos
