Fannie and Freddie, Your Time Is Up!

Fannie Mae and Freddie Mac are the two largest mortgage companies in the US, controlling about USD5.4 trillion worth of mortgage backed securities! In a real anti-free market move, the US Government decided to takeover both ailing companies, in a move to safeguard further losses and thus further cripple US financial economy. Talk about US being a strong advocaat of free trade and market economy! This is another classic case of using American taxpayers' money to bailout companies that have committed wrongdoings in managing public funds!

It is widely expected the current leaders of both companies will also be removed.

Following yesterday's decision, Asian stock markets have responded with major rallies, such as Hong Kong's 4.3%, Singapore's 4.77%, South Korea and Taiwan's more than 5% rally! The exceptions are China and Malaysia. China is beset by concerns of a domestic credit crunch as giant public offerings sap up liquidity. Malaysia's lack of market movement is due to continued uncertain political uncertainties.

Both US and Europe stock markets are expected to respond positively to this move today.

However, in my view this is only a technical rebound. It does not mean the worse is over.

For more detailed breaking news on this takeover, please play the You Tube video below: