Fanny Mae and Freddie Mac have been around for many decades and were developed as Quasi Governmental Organizations to cover the home loans of America to secure the banking industry.
What you need to know is that your home was probably covered under one of these banks. Whether you took out a subprime loan under $700,000 or a Fixed 30 year loan or a 5 year ARM the almost 10 Trillion dollars that these two organizations covered in the USA included almost everyone.
This is a big difference between the previous bailouts of Bear Sterns and other individual institutions and the main reason that the FED had to step in before there was a problem.
Today there are about 2 million homes at risk of foreclosure and already at least 100 billion dollars of write downs or losses have been felt across all of our banks. This is loss in profits for many years to come for these banks and has weakened our country as our banks are being bought up by investors outside our country.
The reason investors outside our country are a dangerous thing is because we already run a debt with most countries. Saudi Arabia, China and Japan are heavy owners of our country and for years it has been known that they own most of the skyscrapers in all of our major cities.
So you are saying to yourself I don’t care who owns the business i work for or the banks I get a home loan from I just want to go to work and maybe spend some time with my family.
Well this is the problem when laws are passed to preserve your rights they apply only under standard situations.
If there was a run on the banks foreign investors could close loans or deny credit or change terms to protect their own interests. If the bank you work with is internal then they have a vested interest to make sure their processes benefit not only their needs but also foster an amount of growth that will sustain their lendies.
So, this is the problem. We saw a shift in investments from the failing building industry after supply outgrew demand and now large investors have been targeting oil futures.
In recent years we have seen oil costs sky rocket because investors saw them as an alternative and stable investment. America needs oil and will always need it as they invested in futures they guaranteed that their money would see a high return as no alternative transportation method is available for most Americans.
In the long term we have seen all of our industries move outside the country. It started with our Heavy Industries like chemicals and steel production then our electronics and other mid term goods like appliances. Then Support and Tech staffs were outsourced and our banks were taken over.
America is in a pretty bad situation and to reduce a long term depression to a recession our banks have to be backed by our government that is taking out loans from other countries.
It is a very sad situation and pretty much like bailing out a battleship with a Dixie cup.
So is this bailout necessary? Yes
Could we have prevented it? Yes but that would mean turning back the clock 50 years and saving all of the industries that supported our economy.
Can we do anything today? Yes think about how you spend your money. Is it staying in our country or going outside…. And your investments are they fostering sales to other countries or purchases from other countries.
Your kid might want that PlayStation or Nike Sneakers but if you promote outsourcing will you be making it harder for your grandchildren.