The US federal government’s takeover of mortgage finance giants Fannie Mae and Freddie Mac not only “exposes the worst possible face of capitalism, one where a taxpayer guarantee is substituted for the old adage of buyer beware”, but also indicates the tough financial challenges ahead for the new president of America.
Whether it is Obama or McCain, whoever makes it to the White House at the end of this year would have to find ways to extricate the USA from the fiascoes that Iraq and Afghanistan misadventures have turned into. The taxpayers money is being squandered there and the economy lurches towards a crisis.
In entire history, Afghanistan has proved to be a graveyard of many ambitious and powerful empire builders.
The Australian adds that the two giants (Fannie and Freddie) are “the key players in the US housing sector that together hold, or guarantee, about $US5 trillion worth of home mortgages, and control 90 per cent of the US secondary mortgage market. Their debt is about 46 per cent of the size of the national debt.” And that’s not the end of the story…
“Federal officials are looking at how to tighten regulation of the credit card industry and whether to double loans to bail out the auto industry to $US50 billion ($60.11 billion).” More here…
Another report says: “The US Government’s rescue of Fannie Mae and Freddie Mac has added about $US5.4 trillion to potential Treasury liabilities from the two mortgage giants – a sum that is equivalent to the entire federal debt.
“In a series of moves culminating overnight, Washington took an unprecedented step into the financial sector in a bid to steady an ailing housing market and ease a global credit crunch, analysts said.
“The administration of George W. Bush effectively placed the struggling mortgage finance giants in a ‘conservatorship’, which is the equivalent of a bankruptcy reorganization under government aegis.” More here…
The BBC reports: “Overseas commercial banks – especially those in China and Japan – have directly invested billions of dollars in Freddie Mac and Fannie Mae. China’s three largest lenders – Industrial & Commercial Bank of China (ICBC), Construction Bank of China, and Bank of China – have $10.5bn directly invested in Freddie Mac and Fannie Mae between them.” More here…
The Economist says: “But on a fair-value basis, marking their assets to the current market price, Freddie is insolvent and Fannie not far off. Moreover, with house prices still sliding and foreclosures rising sharply, worse may be ahead.” More here…
(Photo above: US Treasury Secretary Hank Paulson)
Swaraaj Chauhan describes his two-decade-long stint as a full-time journalist as eventful, purposeful, and full of joy and excitement. In 1993 he could foresee a different work culture appearing on the horizon, and decided to devote full time to teaching journalism (also, partly, with a desire to give back to the community from where he had enriched himself so much.)
Alongside, he worked for about a year in 1993 for the US State Department’s SPAN magazine, a nearly five-decade-old art and culture monthly magazine promoting US-India relations. It gave him an excellent opportunity to learn about things American, plus the pleasure of playing tennis in the lavish American embassy compound in the heart of New Delhi.
In !995 he joined WWF-India as a full-time media and environment education consultant and worked there for five years travelling a great deal, including to Husum in Germany as a part of the international team to formulate WWF’s Eco-tourism policy.
He taught journalism to honors students in a college affiliated to the University of Delhi, as also at the prestigious Indian Institute of Mass Communication where he lectured on “Development Journalism” to mid-career journalists/Information officers from the SAARC, African, East European and Latin American countries, for eight years.
In 2004 the BBC World Service Trust (BBC WST) selected him as a Trainer/Mentor for India under a European Union project. In 2008/09 He completed another European Union-funded project for the BBC WST related to Disaster Management and media coverage in two eastern States in India — West Bengal and Orissa.
Last year, he spent a couple of months in Australia and enjoyed trekking, and also taught for a while at the University of South Australia.
Recently, he was appointed as a Member of the Board of Studies at Chitkara University in Chandigarh, a beautiful city in North India designed by the famous Swiss/French architect Le Corbusier. He also teaches undergraduate and postgraduate students there.
He loves trekking, especially in the hills, and never misses an opportunity to play a game of tennis. The Western and Indian classical music are always within his reach for instant relaxation.
And last, but not least, is his firm belief in the power of the positive thought to heal oneself and others.