FBI Begins Probe of AIG, Lehman, Fannie, Freddie

US accuses them of dodging due diligence as crisis fallout spreads

(NEWSER) - The Federal Housing Finance Agency—the agency behind Fannie Mae and Freddy Mac—has filed suit against more than a dozen big banks for their role in the mortgage meltdown mess. The feds, seeking billions in compensation, accuse the banks of misrepresenting the quality of mortgage securities, reports the New York Times . The suit accuses institutions including Bank of America, JPMorgan Chase, Goldman Sachs, and Deutsche Bank of failing to perform proper due diligence and missing evidence that borrowers’ incomes were inflated or falsified. More»

(NEWSER) - As Wall Street banks collapse like a house of cards, American capitalism isn’t just failing in practice; the very idea of unregulated, free-functioning markets has received a serious blow, writes Anthony Faiola in the Washington Post. Once the symbols of American economic might, there's a real possibility that many US banks may find themselves partially government-owned as part of the bailout, altering America’s influence in pushing laissez-faire policies in controlled economies worldwide. More»

The US has pledged some $320 billion in bailouts for struggling enterprises

(NEWSER) - More than $320 billion in taxpayer funding has already been pledged to treat firms sickened by the subprime contagion—more than twice the $124 billion the government spent fixing the savings and loan crisis in the 1980s, reports the Los Angeles Times. The question, writes Michael Hiltzik, is how much farther will this "bailout binge" go? More»

Obama, McCain haven't talked much about US economy—now they'll have to

(NEWSER) - The crisis on Wall Street will change the shape of the presidential campaign in its final weeks, forcing both sides to adjust their messages and strategies. Mike Allen, in Politico, details four major effects:

• Neither John McCain nor Barack Obama has talked much, or in detail, about economic plans. No saving that for January 2009 now.

Financials plummet on the prospect of a GSE bailout

(NEWSER) - The markets took a tumble today as familiar fears about a government bailout of Fannie Mae and Freddie Mac returned to the fore, MarketWatch reports. Led by its financial components, the Dow fell 180.02 to close at 11,479.88. The Nasdaq shed 35.54, settling at 2,416.98, while the S&P 500 dropped 19.54 to close at 1,278.66. More»