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Obama moves to abolish Freddie Mac and Fannie Mae

The administration of American president Barack Obama today moved to abolish Freddie Mac and Fannie Mae, the gigantic state enterprises that helped channel unsustainable sums of money into housing before the credit crunch.

The Obama administration outlined proposals in a white paper released today that aims to reform America’s housing finance market.

These include the abolition of the two government-sponsored enterprises, too-big-to-fail financial institutions were designed to lubricate America’s mortgage market.

The enterprises helped fulfill one of America’s key bipartisan political initiatives before the credit crunch – promoting home ownership.

The new Obama plan still commits to helping Americans with choices in the rental market and gain access to the credit required to buy a home.

But the white paper proposes that, overall, the government should aim to reduce its involvement in the housing market.

The white paper identifies a number of flaws in the previous system of encouraging real estate investment over and above other sectors of the economy.

Among these was the fact that taxpayers sponsored Freddie Mac and Fannie Mae and became responsible for their enormous liabilities. (article continues below)

However, even after the credit crunch, Fannie Mae and Freddie Mac together support 90% of the American mortgage market.

The white paper itself notes the fragile state of the American housing market and cautions that any reforms are to be implemented at a stable and measured pace to support the economic recovery over the coming years.



London Stock Exchange agrees merger with Canada’s TMX

The London Stock Exchange has agreed to merge with Canada’s TMX Group. The merged group will be co-headquartered in both London and Toronto and will have more than 6,700 companies listed on the combined exchanges with a market capitalisation of £3.7 trillion, the firms said. The LSE’s chief executive Xavier Rolet will head up the […]


Insurers begin to pull guaranteed annuity quotes ahead of Euro ruling

Canada Life will stop offering a guarantee period for annuity quotes from February 25 due to the uncertainty surrounding the European Court of Justice ruling on gender discrimination in annuity pricing. The ECJ’s final decision, due on March 1, follows an opinion statement from advocate general Dr Juliane Kokott questioning whether the use of gender […]

James Hay adding online Sipp duo

James Hay & The IPS Partnership is launching two new Sipp products on February 14. The Sipp provider, which will also change its name to The James Hay Partnership, says it is unveiling the James Hay Partnership Sipp and the iSipp in response to market demand. The James Hay Partnership Sipp will be a full […]

Time to stop the salami slicing on tax relief

Steve Webb  – Director of Policy and External Communications As the Autumn Statement approaches, Steve Webb calls for the Government to stop tinkering with tax relief. Twice a year, in the run-up to the Spring Budget and the Autumn Statement, we face a torrent of speculation as to what changes the Chancellor might make to […]


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  1. Watch out for the double dip Sept 2011

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